Plugins, mods, and other resources
From an end-user’s perspective:
Plugins are modifications to the code, that provide for new features or expanding existing features. This could mean you have a new Textpattern tags you can use, such as <txp:smd_if> or <txp:glz_custom_field> it could give you new features in your admin panel, such as a mysql database manager (via rss_admin_db_manager), etc. etc. Basically, if there is something you want to do with Textpattern for which you can’t find a built-in means to do so, then there’s possibly a plugin for it, or a plugin can be made for it.
From a programmer/developer’s perspective:
Plugins provide an easy way for developers to create new tags for Textpattern templates, and to introduce new features for the back and front end. They are easy to create for anyone with some PHP experience. A new template tag can be as simple as a single PHP function containing a single line of code.
Most things that can be done by modifying the Textpattern core code can be achieved in a plugin. This is a sensible approach in the long term: modifying the core code means you have to re-apply your changes each time you upgrade. If you put your code in a plugin instead, most upgrades require no changes at all.