In short:
Domain Name Service
For a deeper explaination:
It resolves names into addresses. If you try to go to google.com, there is actually an assumed dot at the end of the name so it could realistically be written "google.com." but no one types the final dot anymore. When it is decyphered it is read from right to left and again assumes a "." appended to the right which is also known as "root". The breakdown goes sort of like this with the exception of a couple of recursive returns which we will not get into:
You want to go to google.com.
1. It asks one of the internet "root" DNS servers where the most available "com" DNS server is. That returns an IP of the most available "com" DNS server to your PC.
2. Your computer then asks the most available "com" server where the most available "google" DNS server resides. It returns the IP of the most available google DNS server.
3. Your computer then contacts the "google" DNS server for the IP of it's most available web or other server which of course your computer uses to get the information you requested.
So it is basically a directory assistance. I made it a little simpler for explanation sake because I basically did not include an DNS server designated for your machine that your ISP provides and instead made your machine do all of the looking up.