What does "#include <iostream>" do?

In order to read or write to the standard input/output streams, you need to include it.

int main(int argc, char * argv[])
{
    std::cout << "Hello, World!" << std::endl;
    return 0;
}

That program will not compile unless you add #include <iostream>

The second line isn't necessary:

using namespace std;

That does tell the compiler that symbol names defined in the std namespace are to be brought into your program's scope, so you can omit the namespace qualifier, and write for example:

#include <iostream>
using namespace std;

int main(int argc, char * argv[])
{
    cout << "Hello, World!" << endl;
    return 0;
}

Notice you no longer need to refer to the output stream with the fully qualified name std::cout and can use the shorter name cout.

I personally don't like bringing in all symbols in the namespace of a header file... I'll individually select the symbols I want to be shorter... so I would do this:

#include <iostream>
using std::cout;
using std::endl;

int main(int argc, char * argv[])
{
    cout << "Hello, World!" << endl;
    return 0;
}

But that is a matter of personal preference.

That is a C++ standard library header file for input output streams. It includes functionality to read and write from streams. You only need to include it if you wish to use streams.

# indicates that the following line is a preprocessor directive and should be processed by the preprocessor before compilation by the compiler.

So, #include is a preprocessor directive that tells the preprocessor to include header files in the program.

< > indicate the start and end of the file name to be included.

iostream is a header file that contains functions for input/output operations (cin and cout).

Now to sum it up C++ to English translation of the command, #include <iostream> is:

Dear preprocessor, please include all the contents of the header file iostream at the very beginning of this program before compiler starts the actual compilation of the code.