Textures are images that are used in Materials. They are mapped to the surfaces the Material is applied to. Either Textures are applied directly - for example, for Base Color textures - or the values of the Texture's pixels (or texels) are used within the Material as masks or for other calculations. In some instances, Textures may also be used directly, outside of materials, such as for drawing to the HUD. For the most part, Textures are created externally within an image-editing application, such as Photoshop, and then imported into Unreal Editor through the Content Browser. However, some Textures are generated within Unreal, such as Render Textures. These generally take some information from the scene and render it to a Texture to be used elsewhere.

A single material may make use of several textures that are all sampled and applied for different purposes. For instance, a simple material may have a Base Color texture, a Specular texture, and a normal map. In addition, there may be a map for the Emissive and Roughness stored in the alpha channels of one or more of these textures.

You can see that, while these all share the same layout, the colors used are specific to the purpose of the texture.