From Official Factorio Wiki
A chunk is an area of 32x32 Tiles and so it contains 1024 tiles, and logically has the area of 1024 tiles.
It's second meaning is the length of 32 tiles.
What chunks are technically used for
Chunks are used for
- map generation. When the player runs around, he reveals the map, or the radar explores this is done in chunks, because memory needs to be allocated, map needs to be calculated etc.
- chunks are "switched off", to spare CPU. If nothing (important) happens in a chunk (only fishes swimming around and other rules like that) the chunk is not computed for the next Tick.
- pollution. The pollution-model is based on chunks, the pollution spreads to the neighbors.