Containers are a solution to the problem of how to get software to run reliably when moved from one computing environment to another. This could be from a developer's laptop to a test environment, from a staging environment into production, and perhaps from a physical machine in a data center to a virtual machine in a private or public cloud.
A container consists of an entire runtime environment: an application, plus all its dependencies, libraries and other binaries, and configuration files needed to run it, bundled into one package.
Containers, make available protected portions of the operating system—they effectively virtualize the operating system. Two containers running on the same operating system don't know that they are sharing resources because each has its own abstracted networking layer, processes and so on.
Docker provides tools to make creating and working with containers as easy as possible. Containers sandbox processes from each other. For now, you can think of a container as a lightweight equivalent of a virtual machine.
Linux Containers and LXC, a user-space control package for Linux Containers, constitute the core of Docker. LXC uses kernel-level namespaces to isolate the container from the host. The user namespace separates the container's and the host's user database, thus ensuring that the container's root user does not have root privileges on the host. The process namespace is responsible for displaying and managing only processes running in the container, not the host. And, the network namespace provides the container with its own network device and virtual IP address.
Another component of Docker provided by LXC are Control Groups (cgroups). While namespaces are responsible for isolation between host and container, control groups implement resource accounting and limiting. While allowing Docker to limit the resources being consumed by a container, such as memory, disk space and I/O, cgroups also output lots of metrics about these resources. These metrics allow Docker to monitor the resource consumption of the various processes within the containers and make sure that each gets only its fair share of the available resources.
In addition to the above components, Docker has been using AuFS (Advanced Multi-Layered Unification Filesystem) as a filesystem for containers. AuFS is a layered filesystem that can transparently overlay one or more existing filesystems. When a process needs to modify a file, AuFS creates a copy of that file. AuFS is capable of merging multiple layers into a single representation of a filesystem. This process is called copy-on-write.