Here is a real-world example: if I give you a pound coin, it is a token. We just call it a pound because that is the currency used in the UK, it’s just the medium of exchange. Some currency authors, to avoid confusion with currencies, will use the word “token” instead of “coin”. It’s just a medium of exchange.
What tokens mean for the blockchain depends on the system you are using them in. If it’s a currency, then it’s a coin that is traded. If it’s something like an energy trading scheme, then it could be something like a kilowatt hour of energy. So you need tokens to exchange information between parties.
For more on this, see this answer.