Modules are lightweight and flexible extensions used for page rendering. Sometimes modules are linked to components such as the “latest news” module which links to the content component (com_content) and displays links to the newest content items. These modules are mostly visible as the “boxes” that are arranged around a component on a typical page, for example, the login module. Modules are assigned per menu item, so, for example, you can decide to show or hide the logon module depending on which component (menu item) is used. However, modules do not need to be linked to components; they don't even need to be linked to anything and can be just static HTML or text.
Modules are managed in the Administrator by the Module Manager (help screen).