Google Docs runs in your internet browser and your documents are stored on Google's servers rather than on your own Mac. The up side to this is that your documents are always backed up offsite and available to you on any computer, Mac or PC. The downside is that you need to be connected to the internet to access your documents.
You can get to Google Docs at docs.google.com. You need a Google account to use Google Docs, but you can create one from the Google Docs page. Also on that page is a tour that you can take to get more information.