Cache in this context is a local copy of 'stuff from the internet'.
Many websites reuse things like images, style sheets, scripts and other assets (webpages are made up of lots of files types). Web browsers keep a local copy of these files to avoid downloading them for every page request. It makes browsing faster & more efficient (less data is transferred this way).
This means when you visit a site like Apple.com Safari grabs the logo and keeps it around incase you visit another page that is using the same file.
The main issue with cache's is that the server may change the file & your browser could use an out of date copy, clearing the cache will cause Safari to fetch the new version & cache it again.
OS X has other caches, but it generally manages these fine on it's own.