Peat is partially decayed organic matter and vegetation that turns solid and combustible over the course of thousands of years. It’s harvested in bricks from bogs, dried out, and taken to distilleries where it’s burned to dry malted barley.
After you malt barley, you need to dry it out. Generally you dry it in a kiln with hot air from a fuel source. Traditionally in Scotland, many distilleries near the ocean used Peat as a fuel source for drying barley. Over time, coke and coal became more popular, but some distilleries, most notably in Islay, stuck to using peat. Peat imparts a rich smoky flavor. Unpeated whiskies are made without peat, peated whiskies are made with peat.