Late to the party, but for posterity, and deliberately (i) steering clear of technicalities and (ii) covering basics selectively:
Many objects of interest, such as curves (line segments, circles, parabolas, splines, ...), surfaces (polygons, spheres, tori, ...), and regions (solid rectangles and boxes, disks, balls, ...), are sets of points.
One way to describe an object is implicitly: By giving a "defining" equation or inequality, such as (in the plane) $y = mx + b$ for a non-vertical line, or $x^{2} + y^{2} = 1$ for the unit circle, or (in space)
$$
(x - x_{0})^{2} + (y - y_{0})^{2} + (z - z_{0})^{2} \leq r^{2}
$$
for the closed ball of radius $r$ and center $(x_{0}, y_{0}, z_{0})$.
Another way to describe an object is parametrically: By giving mapping whose domain is an open set in a Cartesian space (or the closure of an open set) and whose image is all or part of the object. The name is self-descriptive: We are describing points of our object in terms of parameters, variables that range independently over some region.
The prototypical example is arguably Cartesian coordinates, which parameterize a line in terms of a single real number, or a plane in terms of ordered pairs of real numbers, and so forth.
Among infinitely many other possibilities the unit circle can be described parametrically using
- Trig functions, $x = \cos t$ and $y = \sin t$, with $t$ real. Every point on the circle has the form $(\cos t, \sin t)$ for some real $t$, and distinct values of $t$ specify the same point if and only if they differ by an integer multiple of $2\pi$.
- Rational functions, $x = 2r/(r^{2} + 1)$ and $y = (r^{2} - 1)/(r^{2} + 1)$ for some real $r$. These formulas define a one-one correspondence between the real line and the circle with $(0, 1)$ removed.
For another example: The parametric curve $x = 5t + 10$ and $y = 50 - t^{2}/2$ can be written implicitly by eliminating the parameter, here solving the first equation for $t$ in terms of $x$, then substituting in the second equation. The end result is $y = 40 + 2x - \frac{1}{10}x^{2}$. This implicit equation defines precisely the same parabola as the parametric formulas, but contains strictly less information, namely the details on how the parabola is traced as $t$ varies. (Generally, eliminating the parameter is More Difficult than this; even when possible, eliminating the parameter may not define exactly the same set of points, or the parametrization may multiply-cover the object. The circle examples illustrate both possibilities.)
Conceptually, parameterization sets up an address (an ordered tuple of real numbers) for points (geometric locations).
Practically, a parameterization often reduces the study of an object to the study of intervals (parametric curves), regions in the plane (parametric surfaces), or regions in space (cylindrical and spherical coordinates, for example). In multivariable calculus, we almost always compute integrals over curves and surfaces by parameterizing the domain, which reduces us to computing an ordinary one-variable or two-variable integral.