The search terms report shows the actual queries people typed before your Google ad showed or was clicked, as opposed to the keywords you bid on. It is the single highest-return maintenance view in a Search account.
Keywords versus search terms
A keyword is what you target; a search term is what a real person actually searched. With broad and phrase match, the two can diverge sharply. The search terms report is where that gap becomes visible, and where you catch the off-intent traffic quietly draining budget.
What to do with it
Review it regularly and add irrelevant queries as negative keywords, promote high-intent terms into their own tightly matched ad groups, and use it to sanity-check what a broad match keyword is really matching. Note that Google withholds some low-volume terms for privacy, so it is thorough but not complete.