Debian is a free operating system for your computer. An operating system is the suite of basic programs and utilities that allow a computer to work. Debian uses the Linux kernel (the core of an operating system), but most of the basic tools of the system come from the GNU project; hence the name GNU/Linux.
Debian GNU/Linux is much more than just an operating system: it contains thousands of packages; packages are precompiled software components designed to install easily on your machine.
This package of a CD contains the basic system. The rest of the software is installed by the network (netinstall).