Solutions are a part of the ALM for the Power Platform. Use solutions in order to gather different parts such as entities, apps, flows etc. and move those artifacts between environments.
Solutions can be devided into managed solutions and unmanaged solutions.
Solutions is a concept which comes from the Microsoft Dynamics CRM platform. Over the years there have been different opinions in the community whether to use managed solutions or not. According to Microsoft unmanaged solutions are intended for development environments only and managed solutions are intended for all other environments such as test and production.
Solutions Concepts Solutions in Microsoft Docs
Known limitations Known limitations when using canvas apps, flows, and custom connectors in solutions