Social networks allow you to connect with other people. These sites are generally used for personal networking with friends and family which might include sharing updates about your life, sharing images or videos and sharing links or other content you think is interesting or important. They are also useful for allowing you to catch up with what those in your network are doing and to keep in touch with those who may be geographically displaced from yourself. Business networks tend to be used professionally (which you can read about elsewhere in this wiki), but many companies use sites like Facebook to engage with their customers, sometimes using a different type of account to individual users.
Most sites are FREE, although premium and business accounts may be charged a fee.