The .htaccess is a distributed configuration file, and is how Apache handles configuration changes on a per-directory basis.
WordPress uses this file to manipulate how Apache serves files from its root directory, and subdirectories thereof. Most notably, WP modifies this file to be able to handle pretty permalinks.
# BEGIN WordPress
RewriteEngine On
RewriteRule .* - [E=HTTP_AUTHORIZATION:%{HTTP:Authorization}]
RewriteBase /
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
# END WordPress
