Yeoman is both a generator builder and an ecosystem. A generator is basically a plugin which will generate files based on user input. Plugins can be run with the yo command to scaffold complete projects or useful parts.
Therefore, the goal of a Yeoman generator is usually (but not necessarily) to speed up the setup and installation process of a project or part of a project by packaging it inside a module that can be configured through a question/reply workflow from the command line.