A video compressor is a piece of software that makes digital video smaller, usually by reducing the quality. There are many approaches to video compression, all of them with various controls and tradeoffs between quality and size.
Video compressors ship as a standard part of Windows, and can also be added to your system by other software products.
In order to view a video file you have compressed with a given compressor, the computer you use to view the video must have a corresponding decompressor installed.
The combination of a compressor and decompressor is known as a codec.