Entities (people, places, organisations, things) are things that exist separately from other things.
Search engines are building a database of every-thing, their characteristics, the classifications they belong to, and the relationships between them. For example Google’s Knowledge Graph.
Andrei Prakharevich for SEO Powersuite has created a very accessible introduction to entities, including the core concept of entity classes, which enhance Google’s ability to understand content at a concept level – to a greater extent than is possible with their keywords based approach or links. Links are great input into understanding the quality of the page’s content, but not the relevance.
A deep dive on entities can be found here https://mobilemoxie.com/blog/entity-first-indexing-mobile-first-crawling-1-of-5/. The fascinating point here is how the move to mobile-first indexing was not primarily about mobile-first indexing!