According to me the most confusing subjects for me to grasp early on was to understanding the SharePoint hierarchy. After so many searches, I understand the hierarchy of SharePoint. Please see below table to understand it.
The Great SharePoint Hierarchy:
Farm -----------------------------------------------------------
web Application -------------------------------------
Content Database --------------------
Site Collections -----------------------
Sites -------------------------
List ----------------
Document Library---
Workflow ---------
Content type ----
|
SPFarm
SPWebApplication
SPContentDatabaseSPSite
SPSite
SPWeb
SPList
SPDocumentLibrary : SPList
SPWorkflow
SPContentType
|
As you can see, at the top of the hierarchy are the Farm. This encompasses all the physical servers that comprise your SharePoint installation. After SharePoint was configured we can create multiple Web Application in the farm. Each web application data will store in a separate content database. For a single web application, we can create several site collection, and a site collection can contain several sites in it. When all sets up we can create Lists, Document Libraries, Workflows, Content type and many things in your site.
SharePoint provide the different level of permissions and security to make difference between different types of users.