CMS are content management systems - a method of easily adding content into your website. They started out as a way of letting people make basic changes to a site without knowing HTML, but they've grown rather beyond that. These days CMS's are about working smarter; a tool that allows you to stop reinventing the wheel over each change to your website. With a well set up CMS you can easily add different templates and types of content to your site, and they form the basis for most e-commerce and web application-based sites.
For a more in-depth summary we recommend:
http://en.wikipedia.org/wiki/Web_content_management_system
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