Environment or organization is the workspace for a particular user.
For Example, if you sign up to a Facebook account, you will be provided a unique username and password. The same approach, if you subscribe to the Force.com cloud computing, you will be provided a valid credential to work in your specified cloud computing area of the environment or Org.
The Salesforce environment provides accessibility to develop, test the apps, and can be used for production also. This environment can be customized according to your requirements such as Apex code, workflow, Custom DB attributes, and objects.
