CSS stands for "Cascading Style Sheets". A style sheet is a document, or part of a document, that controls how a web page looks. You can have CSS information embedded at the top of your HTML, inside your <head>, or interspersed throughout your HTML using the style="..." attribute on various HTML elements, but the most useful method is to include your stylesheet as a separate document using <link>s in your <head>. This is because you can then use the same stylesheet with multiple web pages, to keep a consistant look across them.
Style sheets let you completely separate your content from your layout and design information. You can change the look of level-one headings (<h1>) once in your style sheet, and all of the level-one headings in all of the pages that use that stylesheet immediately use the new look. You can even use style sheets to control layout, so you could, say, move a navigation panel from the left side to the right side, or turn it into a bar across the top, and have that change appear in all of the pages in your web site at once.