In Drupal, blocks are contained areas of content or functionality that can be placed in various regions on the page. Drupal comes with many blocks already created. Modules that you might download also contain blocks and blocks can be created by you.
When a block is added by you or a module, that block can be adjusted to fit the needs of your site. The size, shape, position and which page the block displays can be changed to accommodate your site. With all blocks you can also determine if you want the blocks to appear for certain users and you can even limit blocks to appear on certain content types.