Users - Hard Disc Organisation
This is a very simplified view, but hopefully will give an idea of what goes where.
User Areas
Like all modern computers, macOS is designed to cope with more than one person using the computer. It does this by allowing you to create 'users' who each effectively have their own computer. When you switch on, you are presented with a list of all users that have been set up. You click on whichever is you, (probably) enter a password and start work, as if you were the only person using the machine.
How does it do this? Your hard disc is effectively organised into areas. Firstly, there's the bit that houses macOS itself. Obviously, all users need to share this. Secondly, there's a folder called Applications in which programs are stored - again, available to all users, but thirdly, there is an area for each user, and it's specific to them.
Each user's area is known as a Home Folder - represented by a house icon. In here are settings specific to each person (held in folders called Library and Preferences) and a Documents folder for, well, the documents you create! So, you will have your own songs in iTunes, your own photos in Photos and so on.
User Types
Users can be administrators or standard users. Administrators are allowed to control much more of what happens to the Mac - installing programs etc. If you are sharing your Mac with - dare we suggest the children - it's very wise to have one administrator who has a good password, to prevent too much 'experimentation'!
Installing Applications
This can only be done by administrator users and macOS will require you to enter your password to verify your status as an administrator. Many programs come with installers which will work automatically, but some require you to drag their icon to wherever you want to store the program - usually the Applications folder.