What is actually firewall?

Firewall separates two networks. It allows certain things to go in and out. It can also allow certain packets from cetain hosts to goto certain places.

In even simpler terms, it controls what gets into the network and where it can go and it also can control outgoing traffic.

In places where there are people who are very concerned with security, place firewall between internal network and external network to make sure they don't get hit by spammers/hackers from outside.