Despite the name, Apple TV isn't an actual television set. It's a streaming device similar to Roku and Amazon's Fire TV. The little black box is an inch-and-a-half tall, less than four inches along its sides, and runs on a platform similar to the iPhone and iPad, which means you can download a whole host of apps and games beyond standard streaming video from Netflix, Hulu, Amazon, etc.
Apple TV is designed for streaming movies and TV shows to your HDTV, similar to Roku and Google's Chromecast, but that is only one feature. You can also listen to and watch podcasts on it, play games, stream music, and much more. It all depends on the apps you install. Some programs are free, some cost money, and some are free to download but have a service you have to buy to use it (e.g., HBO). The only two things you will need to set up Apple TV (besides an actual TV) is an HDMI cable (not included) and an internet connection. Apple TV includes an Ethernet port for a hardwired Internet connection and also supports Wi-Fi. It also comes with a remote control.