When you have lots of something, you have a large amount. When your dad asks how much ice cream you want in your bowl, you can answer, "Lots."
In some cases, you can use the informal lots interchangeably with a lot, like when you promise your teacher you'll spend lots of time studying your spelling words. And if you're recovering nicely from the flu, you can say you feel lots better. Lots was originally used this way beginning around 1800, and even though it doesn't conform to formal English, we still use it lots today.