What Depravo said, it's the primary PC games marketplace.
It also serves as a big community with online groups, game hubs, etc.
There is also a community marketplace where you can buy, sell, and trade trading cards, crafted badges (which go on your profile), profile backgrounds, in-game items from certain games such as TF2 and CSGO, etc.
If you ever hear of "Steam Sales," it is because Steam has regular sales where literally everything goes on sale. Big-name games that may have released just a few months ago can often be found marked down for 50% or more. The Steam Summer Sale is the best example of this. All AAA and indie titles alike undergo huge sales.
Many PC games require Steam, as they may only be available on Steam, even those bought on a disc at retail. Steam is also a DRM service, you see. When you buy a game, you have to do a one-time online verification check when you install the game. From there on, you can play it offline wherever and whenever as much as you want.
Also, fun fact: Steam is the largest digital games distributor in the world. Because almost every PC gamer has a Steam account, it generates more sales than XBL and PSN combined. Dunno about GameStop or the like, but I wouldn't be surprised if it surpasses their sales as well. Steam has thousands of games spanning almost three decades of PC gaming.
Here's a source for that:
https://medium.com/steam-spy/steam-sales-in-2015-2e81a6bb0f5a#.24a7560gj
I hope this helped!