I think, primarily, I need to explain what is Azure automation and then why we need to use it. Azure automation is an application (SaaS) that we can automate manual tasks, long-running process, or repeated tasks in it. It was designed for Cloud purposes only but right now it can be used in on premise environment too. if it is used properly, it really saves time, money and increase reliability of regular admin tasks.
Runbook is a set of tasks that perform some automated process in Azure automation. It can be anything like power off a server after 5pm, run a service in a virtual machine, collect a log, or trigger a job. Also, it can be very complex jobs that consists of many runbooks, jobs, PowerShell scripts. Runbook basically can do anything what PowerShell does. Because it uses PowerShell and Windows PowerShell Workflow. We are really lucky because there is a runbook gallery:) we can use as they are or customize them.