Components are a powerful, clean way of organizing your UI code into self-contained, reusable chunks. They:

• can represent individual controls/widgets, or entire sections of your application
• contain their own view, and usually (but optionally) their own viewmodel
• can either be preloaded, or loaded asynchronously (on demand) via AMD or other module systems
• can receive parameters, and optionally write back changes to them or invoke callbacks
• can be composed together (nested) or inherited from other components
• can easily be packaged for reuse across projects
• let you define your own conventions/logic for configuration and loading

This pattern is beneficial for large applications, because it simplifies development through clear organization and encapsulation, and helps to improve runtime performance by incrementally loading your application code and templates as needed.

Content referenced from Knockout.js under Components and Custom Elements - Overview.