WordPress has clear documentation on what a plugin is but basically it adds some piece of functionality to your site such as creating Mega-menus or link your contact forms to your MailChimp account.
Some plugins are kept up-to-date and are well used, while others easily break when you update your site. For this reason it is important to verify with a developer when you want to add a Plugin to do something on your site that you are using the best one for what you want and one that is updated regularly.
You can view a large list of plugins here.
For full WordPress details on what Plugins are Click Here.