About Packages
Each package is a compressed archive containing product information, program files, icons, documentation and management scripts. Management applications use these files to safely locate, install, update and remove software.
Packages also include a digital signature to prove their source. Software management utilities verify this digital signature by using a GPG public key. The yum and rpm utilities share a common keyring that stores all of the public keys for approved package sources. The system administrator configures these approved package sources.
About Repositories
A repository is a prepared directory or web site that contains software packages and index files. Software management utilities such as yum automatically locate and obtain the correct RPM packages from these repositories. This method frees you from having to manually find and install new applications or updates. You may use a single command to update all system software, or search for new software by specifying criteria.
About Dependencies
Some of the files installed on a distribution are libraries which may provide functions to multiple applications. When an application requires a specific library, the package which contains that library is a dependency. To properly install a package. The dependency information for a RPM package is stored within the RPM file.
The yum utility uses package dependency data to ensure that all of requirements for an application are met during installation. It automatically installs the packages for any dependencies not already present on your system. If a new application has requirements that conflict with existing software, yum aborts without making any changes to your system.
Understanding Package Names
Each package file has a long name that indicates several key pieces of information. This is the full name of the tsclient package supplied with CentOS:
tsclient-0.132-4.i386.rpm
Management utilities commonly refer to packages with one of three formats:
- Package name:
tsclient - Package name with version and release numbers:
tsclient-0.132-4 - Package name with hardware architecture:
tsclient.i386
For clarity, yum lists packages in the format name.architecture. Repositories also commonly store packages in separate directories by architecture. In each case, the hardware architecture specified for the package is the minimum type of machine required to use the package.

Hello Aseef,
It would be better to give the original link,if you take blog content from any where else.
Don’t mind.
http://fedoraproject.org/wiki/Docs/Drafts/SoftwareManagementGuide/Concepts
http://www.centos.org/docs/5/html/yum/sn-software-management-concepts.html
Suzan
thank your suzan vai for your feedback and for giving such effective url