A basement is a room that's below ground level, underneath the first floor. You might have a laundry room with a washer and dryer in your basement.
Some basements are partially under the level of the street, while others are completely below ground. Many, though not all, houses and larger buildings have basements. Some basements are "finished," with carpeting and solid ceilings and walls, but more often they're very basic rooms used for storage. The word dates from 1730, most likely from the Italian basamento, "column base."