I see that it is being widely used at many places but could not understand in what scenarios I need to use it.
Open Firmware. This was invented a long time ago when Apple was producing laptops based on PowerPC CPUs and Sun Microsystems workstations were still popular. Open Firmware provides a good description of the devices connected to the platform. In Linux kernel the part that works with device data is called Device Tree (DT). More details in the Usage model.