What are ERC 20s?

Could you please explain what ERC 20s are? I've heard a lot about them in the cryptocurrency space, but I'm not quite sure what they represent or how they function. I understand they're some sort of tokens built on the Ethereum blockchain, but I'd like a deeper understanding of their significance and applications. Are they just for trading or do they have more utility? Also, how do they differ from other types of tokens in the crypto world? I'm eager to learn more about this fascinating aspect of digital finance.