In the past, individual Drupal modules enabled features or groups of functionality on a site. However, with more and more focus on building-blocks modules like Views and CCK fields, much of the same functionality offered by these dedicated modules can be created in a much more flexible way. However, this becomes a lot like giving a person a stack of wood and nails and saying, "It's a house!". The Features system is a way of packaging up the blueprints and the carpenter. Just enable a "feature" and the features module will create and configure the building blocks to give you what you need.
Harnessing the Power of Features - Diwd '09