Internship refers to the duration of the period for which you intern with a company or an organization. It is not the same as a full time job, though the experience gathered could be similar.
Internships are the result of a symbiotic relationship between the companies and people. Companies, many times, do not want to go through the formalities of hiring employees for a short duration of time to help them cope with excess work load. Instead, they hire interns for short duration of time at some basic stipend for the extra work. It is also a good way for them to seek out the best talent for their company. They might hire some of their interns as full time employees, if they shine out amongst other interns.
The people, on the other hand, want that kind of exposure and experience at the start of their careers in order to help them get a better understanding of the industry they have chosen for themselves.
The kind of internship you take up and the demands of that internship vary from profession to profession. A person interning with a law firm will be exposed to the nuances of law as a profession. A person interning as a copywriter might start as an apprentice and do something as basic as correct grammar of the material his/her senior has written.
How so ever varied the demands of any internship be it is always helpful to do an internship. It gives you a ground level check and helps you understand any profession in a better way. If you enter a job without having done a single internship you might be slow at catching up and may mar your own chances of success while your colleagues outdo you because of their experience.