Many operating systems use filename extensions, e.g. Unix, VMS, MS-DOS, Microsoft Windows. They are usually from one to three letters (some sad old OSes support no more than three). Examples include "c" for C source code, "ps" for PostScript, "txt" for arbitrary text.
Apart from informing the user what type of content the file holds, filename extensions are typically used to decide which program to launch when a file is "run", e.g. by double-clicking it in a GUI file browser. They are also used by Unix's make to determine how to build one kind of file from another.
Compare: MIME type.