For example: you may own a iPhone, iPad and a iMac. If you have "The Cloud" enabled on those devices then all information saved will be on all your devices.
An example of this is:
1. Take a picture on your iPhone.
2. Your iPhone uploads the image to the iCloud.
3. Your iMac and iPad will then download the image taken on the iphone so they all have it.
Its like an automatic Sync System. I hope this has answered your query of what is the cloud?