Usually output of a command goes to the terminal. Using the concept of Output redirection, the output of a command can be redirected to a file. So insted of displaying the output to the terminal it can be send to a file. '>' character is used for output redirection.
$ pwd > file1
$ cat file1
/home/cg/root
In the above example, the command the output 'pwd' of the command is redirected to a file called 'file1'.