Brace expansion converts "{a,b}{c,d}" to "ac ad bc bd" as an evaluation phase of a command in most Bourne-derived shells.
Brace expansion is one of the series of transformations that commands go through when evaluated in a shell.
It allows to easily multiply strings that share a common format. For example, in bash:
{a,b}{c,d}
expands toac
ad
bc
bd
/dir{A,B}/file{1..3}
expands to/dirA/file1
/dirA/file2
/dirA/file3
/dirB/file1
/dirB/file2
/dirB/file3
, whether or not such paths exist.