The Page component is the basic building block of a site.
It provides a surface on which you can place text and images, and format with HTML.
You can also embed onto this surface other system objects, such a Views of Queries, that provide rich data integration and sophisticated behaviors.
Page components can have 'child' components. This means that the Page component acts like a logical folder in the site structure, with child components (which can be of any component type, including more pages with their own children). The child relationships are then reflected in the site Navigation and in Site Tree components.