Assemble your PC #1 : The Basics

The first step to building a computer is acquiring the parts. This guide will
start with a quick explanation of essential parts and elaborate on them further
on.
A computer is made up of a case, also called a chassis, which houses several
internal components, and the external components, including peripherals.
Inside the case go the following internal parts:
Power Supply/PSU power supply unit, converts outlet power, which
is alternating current (AC), to direct current (DC), which is what the
internal components require, as well as providing appropriate voltages
and currents for the various internal components.
Motherboard/mainboard As the name indicates, this is the electronic
centerpiece of the computer, everything else connects to the motherboard.
Processor/CPU central processing unit, the “brain” of the computer,
most actual computation takes place here.
RAM random access memory, the “short-term memory” of a computer,
used by the CPU to store program instructions and data upon which it is
currently operating. Data in RAM is lost when the computer is powered
off, thus necessitating a hard drive.
Hard Drive/Hard Disk the “long-term memory” of the computer, used
for persistent storage i.e. the things stored on it remain even when the
computer is powered down. The operating system, and all your programs
and data are stored here.
Optical Drive device for reading/writing optical disks. May read CDs,
DVDs, or other optical media, depending on the type. It is essential for
installing many operating systems and programs. It may be able to write
some of these discs, as well. Some people like to have two such drives for
copying disks.

ref:wikibooks