The process of printing and cutting is never 100% accurate. When a guillotine cuts through a stack of colourful flyers, any misalignment can result in a small white strip of unprinted paper down some of the edges.
Adding {Bleed} means extending the background colour or image of your Design. This {Bleed} will be trimmed off leaving your print the correct size, but when the blade cuts slightly out of place it will still hit print rather than plain white paper.