Web services are services for the web (and thus, indirectly, are services for people that use the web).
Web services is a technology that enables interaction between any two applications. In order to get a clear picture look into the example below
Consider a bus booking site. When user selects a bus and input all the information, he has to make the payment and for that the site requires user to select a mode of payment . If user selects CREDIT card as the mode of payment then user has to input all the credit card details. Now these details cannot be authenticated by the bus booking site , it has to request the bank to authenticate the details provided by the user. But how will it interact with the bank because the bank application can be developed in any technology . The bus booking site has no control over which technology the bank application has been developed.
Thats where webservices comes into picture.
It makes the interaction between two applications possible . It accomplishes by serving the data in the standard format such as XML or JSON.
In our example the bus booking site will send all the CREDIT card related information. The bank application will then authenticate the credentials and then return appropriate response to the bus booking site.