Schemas contain rules that help ensure valid data.
Don't let the term intimidate you. Schema is just another word for structure or organization. In XML, a schema contains the rules for what can and can't be in the various parts of an XML data file.
It's important to keep separate the rules in a schema and the rules for well-formed XML. The rules for well-formed XML dictate how your resident expert or IT department has to build a data structure, including any schemas. A schema is XML, and as such it must conform to the rules for well-formed XML.
In contrast, the rules in a schema dictate what can and can't reside in a given data structure. For example, a schema may say that a certain tag can contain only dates and another can contain only prices. Without a schema, the date field in your well-formed XML could contain text, and your price field could contain dates. Your XML would be like a grammatical, but meaningless, sentence.
A schema can be contained in a data file, or it can be a separate file linked to the data file. Either way, whenever you use a data file in concert with a schema, that data file is said to conform to that schema. If your IT department creates a separate schema file, that schema file uses the file name extension .xsd. Data files use the file name extension .xml.