In competition a draw is when either both teams or players will not be able to win and must accept a tie game or when both teams or players agree to leave the game unfinished and accept a tie. Draws are significant in chess because if you draw an opponent that has a higher rating then you then your rating goes up. Also if you are one win ahead in, say, a 20 game match a draw increases the likelihood of your winning the match.

"Winning isn't everything... but losing is nothing"