Decorations are items placed inside an enclosure (usually aquariums and/or terrariums), not including the substrate. Decorations are generally used for aesthetic value, though they can also serve a purpose. As in giving the animal a place to hide, or as a part of reproducing the animal's natural habitat.
Decorations can be anything inside an enclosure that does not include the substrate. Generally, decorations are more prominent in aquariums and terrariums. Though that doesn't mean that there can't be decorations in other enclosures.
Examples of some types of decorations might see in an aquarium or terrarium are: Plants, driftwood, backgrounds, sunken ships/castles, statues, etc.
Decorations are used for aesthetic value. Though some decorations also serve a purpose, as in giving the animal a place to hide, or as a part of reproducing the animal's natural habitat.