IRC stands for Internet Relay Chat. It was invented back in 1988 by a Finnish man Jarkko Oikarinen.
Why is it used? Well, it's pretty much a universal form of chat communication. There's IRC clients for virtually every operating system in existence, and communication between people on it is at instantaneous as any other medium.
If you're looking to learn more about IRC in general, you can look up the page on Wikipedia:
http://en.wikipedia.org/wiki/Internet_Relay_Chat and
http://www.irchelp.org/ . IRC help is a bit outdated, but still carries a lot of good information nonetheless.