Terrain is basically anything that is nonman-made such as hills, deserts, mountains, and so on. Unity's way of dealing with Terrains is different than what most engines do in the fact that there are two ways to make them, one being to use a height map and the other being to sculpt from scratch.
Height maps are a common way for game engines to support Terrain. Rather than creating tools to build Terrain within the level, the artist/designer can use a graphic designing software (such as Adobe Photoshop) to create a greyscale image. These values are then interpreted by the software to calculate its dimensional height based on lightness or darkness. We can translate the image into a Terrain by using this height map.
We've already seen an example of a height map in CleanScene that we used in Chapter 2, Building Custom Weapons. You'll notice that there is an object called Terrain in the Hierarchy tab. This object encompasses all the bumps and hills within the...