,

Honestly I wouldn't worry about custom metadata types for cert exam purposes (or at all if you're just getting used to the concept of metadata) but to satisfy your curiosity....

Custom metadata is customizable and packageable application metadata. You create a custom metadata type, which defines a structure in your

application, then you build reusable functionality that determines the behavior based on metadata of that type.

For example, you can create a custom metadata type that assigns cities, states, or provinces to particular regions in a country.

If you want a deeper dive, here's a good Trailhead module....

Cheers,

Burt