Coolbreeze, welcome to the forum! Modelling is creating a scaled-down version of something: a building, your town, a city, and so on. In essence, you shrink the buildings and people to match the size of your train, but accurately represent the area. So, a steel mill modelers club is representing an industrial area---a steel mill---as the key detail to their train layout. The layout may also include the city around it, or the mountains where the ore is being mined and shipped by rail to the mill: they decide what details to reproduce in the layout.