Glossary
Document library
A document library is a SharePoint container for files, with the same column, view and permission machinery as a list plus version history, check-out and retention. Its rows are files, so nothing exists in it until a file does.
That last point decides a common design question. If you need to track paperwork you are still waiting for, a library cannot help — what is missing has no row. Track the requests in a list and store the arrived files in a library, linked from the row.
Libraries are also where retention policies, approval and version history actually live, so anything with a compliance obligation belongs in one rather than as list attachments.