A role is a collection of permissions defined for the whole system that you can assign to specific users in specific contexts.

For example, there is a role called "Teacher" that is set up to allow teachers to do certain things (and not others). Once this role exists, you can assign it to someone in a course to make them a Teacher for that course. You could also assign the role to a user in the course category to make them a Teacher for all the courses under that category, or assign the role to a user just in a single forum, giving that user those capabilities just in that forum.

See also Contexts, Permissions, Assign Roles and Overrides.