A plugin is a module that extends the functionality of WordPress. They allow you to adjust a site to your needs, without having to write a single line of code.
Since there is a very wide choice of free plugins in the directory, it is important to be careful when choosing which ones you want to install. Some are of better quality than others.
It is important to check if they are updated regularly, if they are compatible with the latest version of WordPress, if users receive answers to their support questions, and also the level of rating the plugin has received from users.
Take a look at WPMarmite's various posts studying plugins in detail in the Plugins section.