Lets say you have a website that lots of people are posting junk to some of its spam, some it isn't, and some of it is just stuff that doesn't belong. Well when it is just you in charge that means that you have to go
Moderate it your self and steer the discussion and content of your site
in one direction, the direction that your sponsors, users, and you know and expect. Great lets see averaging only a few visitors a week know big deal but what happens when your site starts getting a ton of traffic? There is no way that you as the Admin are going to be able to mess with everything. The solution is to create an Elite task force of demi-admins who can enforce what you and your site stand for, They are the moderators!
So where do you find and train these people well I suppose you could put an ad on craigslist and pay somebody to do it but that costs money and could be messy. Alternatively you could just go and find your best and most dedicated users because they are already active in the community, work for free, and are dedicated...
So what do they actually do? Well that depends because its a volunteer position technically they don't have to do anything. So what do most mods do: ban that Asian guys with bad English hawking Chinese knock offs, delete spam, condense threads, sticky threads, edit posts, delete more spam, post articles, ask thought provoking questions, spark discussion, answer questions, trouble shoot problems, show people how to post images, talk with the admin,
ineffectively answer questions about what mods do and delete spam.
Any questions, did I miss anything?