It's is essentially used to control system with a very low timing response : that means (for instance) motors and much more mechanical system with low physical response to a given signal..., thus, the low response system see the signal not as a successive high and low state, but see it like its means value :
a 50% PWM (Freq = 10kHz, low=0V, high=5V for instance) signal is seen like a 2.5V for a system that
cannot follow signal @10Khz.
but it can be used in power supply (buck power supply, boost and flyback...) for the control of the output voltage.
much more applications exist but the PWM is independent of the target you use (AVR or PIC) : the mechanisms are always the same :
frequency
low value
time low
high value
time high
bye