From Joomla! Documentation
Languages are perhaps the most basic and critical extension type. Languages are packaged as either a core language pack or an extension language pack. These packages consist of INI files which contain key/value pairs. These key/value pairs provide the translation of static text strings within Joomla! source code. This allows both the Joomla! core and third party components and modules to be internationalised. Core language packs also include an XML meta file describing the language and providing information about the fonts to use for PDF content generation.
Language packs are extensions that provide translations for the Joomla! system. Joomla! 1.5 and higher supports a full translateable site and administrator interface. Because of this there are two major types of language packs, ones for the site and ones for the administrator, with Joomla! 1.5.4 and higher supporting language packs with both the site and administrator in the one pack .