A material is an asset that can be applied to a mesh to control the visual look of the scene. At a high level, it is easiest to think of a material as the “paint” that’s applied to an object. But even that can be misleading, since a material literally defines the type of surface from which your object appears to be made. You can define its color, shininess, transparency, and much more. In more technical terms, when light from the scene hits the surface, a material is used to calculate how that light interacts with that surface. These calculations use incoming data that is input to the material from a variety of images (textures) and math expressions, as well as from various property settings inherent to the material itself.
Unreal Engine utilizes a physically based shading model. This means that rather than defining a material using arbitrary properties (such as diffuse color and specular power), you instead use properties more easily relatable to the real world. These include base color, metallic, specular, and roughness.