PieCrust is a CMS, i.e. a Content Management System. It looks, by default, like a simple blog engine, but it can really handle any arbitrary set of content. You need however to define what that content is. This is the content model.
The default content model is what you get out of the box. It defines a simple blog site where you can have pages and posts.
To create more complex or customized websites, you can define another content model by specifying sources, routes, and taxonomies in the site configuration:
Sources are how you tell PieCrust where to find your content. It defines in what sub-directories it will find what kind of pages, with what kind of naming convention, and what kind of metadata. In theory, sources can also provide pages from other places than the file-system — like a network connection or a ZIP file or a database or whatever.
Routes define how the content returned by the sources is exposed to your visitors. This defines both the URLs for that content, and the place on disk where it will be baked to.
Taxonomies define special types of metadata on which PieCrust will create index pages. You can generally define any type of metadata on your pages in a completely free-form way, without having to declare anything, but in some situations — like blog post categories — you want PieCrust to create a page that lists all pages assigned with each category.