What Is CAML?

Collaborative Application Markup Language (CAML) is the XML-based language that is used to build and customize Web sites based on SharePoint™ Team Services from Microsoft®.

CAML can be used to do the following:

1. Provide schema definition to the Web site provisioning system about how the site looks and acts.
2. Define views and forms for data and page rendering or execution.
3. Act as a rendering language that performs functions in the DLL like pulling a value from a particular field.
4. Provide batch functionality for posting multiple commands to the server using protocol.

Effective example could be found on How to Use CAML

Source: Microsoft.com