An InDesign book file is a collection of documents that can share styles (e.g. paragraph styles, cell styles), swatches and other master pages.
Book files allow you to manage long documents in a modular fashion, ensuring consistency across your files while automatically managing page numbers across your catalogue.
Book files also afford the user significant computer performance advantages as they allow one chapter or section to be worked on at a time.
A book file itself is a very small data file which includes pertinent information about each separate InDesign file contained within the book.
For more information please refer the detailed Adobe help article https://helpx.adobe.com/indesign/using/creating-book-files.html.