To pawn something is to use it as collateral when you're borrowing money. When you pawn a necklace at a pawn shop, you get cash in exchange for it with the understanding that you can buy it back later.
The benefit when you pawn something is getting cash immediately. The down side is that you'll have to pay more money — the amount you borrowed, plus interest — to get your item back. If you aren't able to do this, the pawn shop will sell it to someone else. As a noun, a pawn is the smallest, least powerful piece in a game of chess, or a description of a person who's being used or manipulated.