Gels are colored pieces of plastic that are fitted over the flash or constant light source to add color to the light.
Gels can be used to color balance light in the picture. If, for example, you are using a flash to supplement tungsten light, you would add a gel that makes the color of the light from the flash the same color as the light from the tungsten bulb. This allows the camera to adjust the white balance across the whole image evenly.
You can also use gels to add interest or an artistic effect to a photograph. The picture below uses a green gel on one of the three flash lights to create warmth, interest, and shape to the light.