Components are the building blocks of a React application. In simple terms, a component is a reusable piece of code that represents a part of the UI of the application. In a way, components can be considered as individual modules that define how a part of the UI should look, behave and interact with the user.

There are mainly two types of components in React: functional and class components. Functional components are basically a JavaScript function that returns a JSX element. They are usually used for representing simple UI elements that do not require any internal state or lifecycle methods. On the other hand, class components are created using ES6 classes and can have internal state and lifecycle methods. They are used for creating more complex UI elements that require state management and interactivity.

To create a component in React, we first need to import the required modules and define the component using either a functional or class syntax. We can then use the component in our application by rendering it using ReactDOM.render() method. Components can be nested inside other components to create a more complex hierarchy of UI elements.

In addition to creating our own custom components, React also provides a set of built-in components that can be used for creating commonly used UI elements such as buttons, forms, etc. These built-in components are called React Native Components and are very easy to use.

Overall, understanding components is a crucial aspect of building a React application. By breaking down our UI into smaller, reusable components, we can make our application more modular, maintainable, and scalable.