Photoshop layers are like sheets of stacked acetate. You can see through transparent areas of a layer to the layers below. You move a layer to position the content on the layer, like sliding a sheet of acetate in a stack. You can also change the opacity of a layer to make content partially transparent.

More information on Layers

Courtesy of Adobe Resource Center

Layers are the building blocks of many image creation workflows. You may not need to work with layers if you are doing simple image adjustments, but layers help you work efficiently and are essential to most nondestructive image editing.

Adobe Help Resource Center on Layers

Textual description courtesy of Adobe Resource Center Help – www.adobe.com