Updated: Jun 22, 2021
Digital photography like everything else now is about data. a camera is just like it used to be earlier , a device to capture your images. It has only moved from imprinting them on a film to imprinting them on a memory card. And then they have added some additional computer capabilities features to make it easier for you to take your pictures. So, needless to say the more data you have the more are your options and possibilities. So there are various formats available for us to store our data in. It is a tradeoff between file size and data size.
The Raw Format is basically asking the computer to just save data in its rawest form, nothing in the raw file is permanent neither the colour, nor the white balance, For example a Black and White picture shot in a raw format can be changed to colour once you download it or post process it. And you can also freely change the white balance using the standard drop down post process options of daylight, shade, cloudy etc. This ofc can be done on other formats as well using the temperature and tint options.
Also the Raw Format is an equival to your Film Negative. You do not make permanent changes to your Raw File, you only make copies of it and make changes to them.
It is always a good idea to shoot in Raw as it will give you amazing post process flexibility and also captures the maximum data of a photo capture.
PS: most people when they ask for raw images would mean they are requesting un-edited images and not your raw format files.