Fermentation is a key part of brewing. This is when the alcohol is created by the yeast. Wikipedia has a decent overview of fermentation that will cover the more general meaning of the word. Here's an overview of the brewing process and where fermentation fits in.
Fermentation is all about the yeast or brewer's yeast to be more specific. The yeast creates the alcohol. It also contributes to the flavor of the beer. What else do you need to know about fermentation? Each type of yeast has different characteristics. Some yeast can live at cooler temperatures and some at warmer. Some yeast can tolerate higher percentages of alcohol so it is used to create beer with a higher alcohol content.