Normal refers to the perpendicular direction of any point, edge, face, etc. Hold our your hand flat in front of you. Then, make a fist with your other hand, and place bottom, with thumb pointing to the sky on the first hand. Your thumb is normal to your hand in this example.
Normals are necessary to determine the direction and sometimes the orientation of any given element. In the cases where some of your polygons may appear to be flipped in relationship to their neighbors, you can activate the normal display to see why.) Normals are used for shading, selection, lighting and mapping. You can also move elements along their normals while modeling (something that you will do quite often).