I get asked this question many times especially by beginners.
My short answer is: ISO is a setting on your camera that helps you to sensitize your camera sensor to the existing lighting conditions.
The longer answer needs explanation. So here goes
The question I would like to ask you is What would you do if you had bright light on a cloudy day (read soft light)?
It would be perfect to take pictures that do not give you sharp, dark shadows.
Soft light is available either during sunrise or during sunset. It is also available at noon too, if the sky is cloudy. Sunlight gets scattered by the clouds, and the light becomes softer in nature. Ok. Softer light softens the shadows.
Let us look at the light during sunrise which is soft. This is good, but within minutes you could be looking at the intensity of sunlight increasing rapidly casting sharp and dark shadows.
Let us look at the evening light just before Sunset. The risk here is that the light becomes darker within minutes and you may have to adjust your settings to get the perfect picture.
When the light goes low I would like to have a maximum aperture. On my macro lens, it is f2.8, which gives me the highest amount of light on the sensor, but this has disadvantages. Parts of the subject like my yellow flower would be sharp and the others would be blurry. Please see my post on exposure and camera shake
The post on camera shake tells you about the other advantages of increasing your ISO.
In my camera, the lowest ISO is 100 and the highest is 6400.
The setting of ISO 100 does not give you much leeway in terms of shutter speed(slow) and f/32 aperture that I need for my picture to not have any blurry parts. I used f22 for ISO 100.
Increase the ISO to 200, the background is blurrier shutter speed came down to 1/3rd of a second for the exposure needle at the center
All you need to do is to move your exposure pointer to the center to see what shutter speed is available. Increase your ISO (ex: 400/800/1600) by a factor of two, and your sensor becomes more sensitive to the available light (darker light). As light becomes darker with every passing minute in the evening, the increase of ISO makes the shutter speed faster for a smaller aperture too.
ISO 400 shutter speed 1 second
ISO 800 shutter speed = 0.5 second
ISO 1600 shutter speed = 1/5 of a second
ISO 6400 shutter speed = 1/15 of a second
The side effect could be noise in the pictures. As you can see noise creeps in at ISO 800 and more so at ISO 1600. Mind you, as the noise increases, the file size in Mb also could increase.
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