Web-based Distributed Authoring and Versioning (WebDAV) is an extension of the HTTP/1.1 protocol. The purpose of this protocol is to present web content as a writable medium in addition to being a readable medium.
WebDAV on Wikipedia and the WebDAV website provide information on this protocol. The WebDAV module implements the protocol for accessing Magnolia's repository on an author instance. This allows users to edit resources and templates on the client computer.