What is the significance of DOCTYPE in HTML document?

An HTML DOCTYPE defines which version of the language you are using, and let's the browser act accordingly.

The DOCTYPE in an HTML document is an idea borrowed from XML. The DOCTYPE file defines the rules that the language has to follow. By making sure you've declared the doctype in an HTML document, you let the browser know how you're expecting that HTML to be treated. In an ideal environment, adding a doctype will allow you to be sure of exactly how the code will be rendered by the user's browser.