A library  (generally referred also as document library though not limited to it) is also a list  but of a different type that stores documents, etc along with the metadata for that document like Title of the document, Author of the document, Date, etc and any additional information you may want to save along with the document contents.

A list will allow you to keep information/date something similar to Employee information Table in any of the data base management system like Employee information, Department information can be stored in 2 different lists. You can also create your own Custom lists  with Custom column to store the information/data.

For more information check this:
office.microsoft.com/.../HA011199881033.aspx