A Joomla component is one of the main building blocks of your Joomla system. 

When you just installed Joomla system on your website, it consists of the core, or, in other words, default components.

If you wish to add some cool extra features to your default Joomla, you will have to download and install extra components. 

Joomla default, or core components, are developed and distributed by Joomla Production Team. Extra components are developed and distributed by 3-rd party developers.

Please, visit "Your Guide to All the Default Components in Joomla" tutorial to learn more about what Joomla components are.