A effect be it a texture animation, complex morph, dynamic simulation or whatever can be proceduraly created from nodes. Now calculating this all the time can be very time consuming! So in order to speed things up export or just plain ensure that it works you can go ahead and bake the ingredients to a totaly predictable for mike keyframes or textures. A bit like a a cake form the oven its just components that are mixed together for a fineal product.
You offcourse loose the tewekability. But gain many other advantages like faster workflow, information to work on etc etc.
What this is sintn specified it might be a texture map with lightning baked on it for games eingene (or plain render with no anaimation done in 4 hours instead of 100) or a cloth sim expanded so that a renderer that doesent understand cloth files can handle or a constraint that has a tendency of crapping up thats baked to a curve for faster lookup and finel tweaks...
How you use technology is up to you however.