It's just hash which is associated with user in database or some other way. That token can be used to authenticate and then authorize a user access related contents of the application. To retrieve this token on client side login is required. After first time login you need to save retrieved token not any other data like session, session id because here everything is token to access other resources of application.
Token is used to assure the authenticity of the user.
UPDATES: In current time, We have more advanced token based technology called JWT (Json Web Token). This technology helps to use same token in multiple systems and we call it single sign-on.
Basically JSON Based Token contains information about user details and token expiry details. So that information can be used to further authenticate or reject the request if token is invalid or expired based on details.