Eclipse uses certain concepts in constructing a user interface. Getting the definition of those basic concepts out of the way, will make the following discussion much easier.
On a physical level, your workspace is based on a folder or directory in which you keep your projects. It also includes all external files and resources that Eclipse knows about. However, a workspace is much more than a collection of files. It also represents the relationships between the files, objects, and actions you can take on them. You can think of the workspace as everything there is, but not necessarily all you can see at any given moment.
You can have any number of workspaces. For example, you might have a workspace for PHP projects and another for Java projects. Although, there is no requirement that you cannot keep projects with a variety of underlying technologies in the same workspace. Another reason to keep distinct workspaces might be to separate work projects from personal...