Backups are a zipped file of everything in your file manager and database. It is always a good measure to have a backup of your site that is not saved on the server for if something bad was to happen. A site could become infected with malware, code edited and the site broken, or something can go wrong with an update. With a backup, nothing is ever permanent, because you can always revert the site back to what it was before you started with the backup.