The Sequencer view is where all the video editing happens. It shows a stack of Channels, which are similar to layers in an image editing program (higher channels are displayed in front of lower ones). Within each channel, you can create one or more strips, which contain either a segment of video content (a rendered scene, an external video file...) or an effect (color blending, blurring...).
The Sequencer view is horizontally divided into each channel can contain what is called a strip. A strip can be an image, animation, or any number of effects. Each channel is numbered consecutively on the Y axis, starting from zero and allows up to 128 total channels. The X axis represents time. Each channel can contain as many strips as it needs as long as they do not overlap. If a strip needs to overlap another, it needs to be placed on a channel above or below the other strip. When strips are stacked, they stack from bottom to top where the lowest channel forms the background and the highest the foreground.