Inkscape is an vector-based image editor. That is to say, instead of being focussed (like Photoshop, for example) on a bitmap graphic, where each pixel on screen is a coloured square, a vector image is made up of shapes that are made up of points and the areas are interpolated.

What does this mean? Well, it means they can be easily resized without ever going pixellated (vector graphics don't have pixels) meaning they are very popular for graphic design and branding reasons.