A feature is a part of the application's total functionality that a user recognizes and may decide to install independently. It is a seperately installable collection of data. Feature(s) can contain several sub-features often called as child feature(s). Hierarchical relationships of parent and child features commonly exist such that if a child feature is installed, the parent feature is automatically installed as well.

For example, if you look at the screen-shot of Microsoft Office 2003 Setup, the product we are installing is "Microsoft Office". The selected item "Microsoft Office Access" is a feature that we want to install. Items following "Microsoft Office Access" are sub-features to the parent item.

Curious to learn more about features? Visit MSDN to know more about "how to use features" in a package.