ISO controls how sensitively the sensor detects light entering the lens. This would be changed depending on the light levels in the surrounding area. A low ISO would be used during a sunny day with lots of light while a high ISO would be used in a dark room with little to no light available. If the ISO is not set to the correct level the photo can come out grainy, too white or too dark.

These are some of my own examples that show varying ISO levels:

The first photo is slightly under exposed due to not enough light being let in.

The second photo has a good exposure.

The third and fourth photos have too high an ISO as they are over exposed.

To ensure the photo looks to be of the best quality, the exposure must be balanced correctly with the Aperture and the shutter speed.