Cookies are usually small text files, given ID tags that are stored on your computer's browser directory or program data subfolders. Cookies are created when you use your browser to visit a website that uses cookies to keep track of your movements within the site, help you resume where you left off, remember your registered login, theme selection, preferences, and other customization functions. The website stores a corresponding file(with same ID tag)to the one they set in your browser and in this file they can track and keep information on your movements within the site and any information you may have voluntarily given while visiting the website, such as email address.
Cookies are often indispensable for websites that have huge databases, need logins, have customizable themes, other advanced features.
Cookies usually don't contain much information except for the url of the website that created the cookie, the duration of the cookie's abilities and effects, and a random number. Due to the little amount of information a cookie contains, it usually cannot be used to reveal your identity or personally identifying information. However, marketing is becoming increasingly sophisticated and cookies in some cases can be aggressively used to create a profile of your surfing habits.