As the name suggests, a Site Collection is a collection of sites. Unfortunately due to confusing terminology, exactly what a site is gets confusing. The best explanation I have seen is that a site collection is nothing more than a bag, a container, an administrative boundary. To keep the terms less confusing, I refer to the objects it contains as
web. A site collection itself does not have any content or any kind of web presentation. When you create a site collection in
Central Administration you assign a site template. This template is not assigned to the site collection itself, but is assigned to a special web that is automatically created after the site collection is created. This web is the
rootweb for the site collection. If you create a site collection with
stsadm you have the option of not specifying a template. If you do not specify one the site collection is still created. The first time someone with appropriate rights browses to the site collection's URL, they will get the template picker page, where they will choose the template that is assigned to the rootweb.
The site collection is the unit of scale in SharePoint. Below are a few of the administrative features that are scoped at the site collection level. These are features that are bounded by the site collection boundary.
When planning your SharePoint goverance, knowing when to scale by site collection or web is imperative.
In the SharePoint Object Model, a Site Collection is an SPSite. The object SPSiteCollection is a collection of SPSites, or a collection of site collections.