Distributions are pre-configured versions of Drupal that include additional modules, themes, or configuration than you'd get if you installed a standard version of Drupal core.
By default, LocalGov includes content types for service pages, service landing pages and sub-pages, and additional menus and taxonomies, a different administration theme and a base theme to use for custom themes, and multiple additional modules that add alert banners, events, content reviews, search, media types, and sub-sites. This is all in addition to what Drupal core itself provides, and can be extended further with additional contrib or custom modules.
Commerce Kickstart was a distribution for Drupal 7 that added eCommerce functionality such as product and order types, shipping and payment methods, stock levels and discounts. Again, this could be extended further by adding more contrib or custom modules.
A few months ago, I started developing a distribution for managing meetup group websites, like PHP South Wales.
If you're starting a new Drupal website, there could be a distribution that exists that could provide some or all of the functionality that you need, and if new features or fixes are added, then they benefit everyone who uses it.
There are 1,430 distributions listed on https://www.drupal.org/project/project_distribution so take a look there and see if anything matches your needs.
- Oliver
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About me
I'm an Acquia-certified Drupal Triple Expert with 17 years of experience, an open-source software maintainer and Drupal core contributor, public speaker, live streamer, and host of the Beyond Blocks podcast.