Reverberation or reverb, as it is more commonly known, is perhaps the most widely used effect. Natural reverb is created by sound waves being reflected off of a surface or many surfaces. For example, when you walk across the wooden stage in a large hall, thousands of reflections are generated almost instantaneously as the sound waves bounce off the floor, walls, and ceilings. These are known as early reflections, and their pattern provides psycho-acoustic indications as to the nature of the space that you are in, even if you can’t see it. As each reflection is then reflected off of more surfaces, the complexity of the sound increases while the reverb slowly decays.
The reason for the widespread use of reverb in audio recording is fairly self-evident: human beings don’t live in a vacuum. Because our brains receive cues as the nature of the space around us based partially on audio reflections, a sense of space in an audio recording sounds more natural, and therefore more pleasing to the listener.