While Sitecore can serve as a UI proxy for storage in other facilities, by default several logical databases are maintained:  

Archive	Contains archived objects.  Sitecore can be configured to automatically remove objects from the Master database to the Archive database on a specific date.  This removes old objects from the Master database but backs up a copy of the object.  You can specify the archive date in the Content Editor » Tasks » Archive Date field.
Core	Contains the Sitecore client.
Extranet	Contains the extranet security settings.
Master	Contains the site under development.
RecycleBin	Contains deleted objects.  Items can be restored via the Sitecore» Administrator Tools» Recycle Bin application.
Security	Contains the client security settings.
Web	Contains the published web site.

Of these, only Core, Master and Web host web sites – the others host secondary data that is used by the websites.  The Core database controls the Sitecore User Interface and is hosted under /sitecore/.  The Master Database contains all versions of all Items in the CMS and is the target database edited through the Sitecore User Interfaces by default.  The Published Web Site is configured to serve the Web Database which contains only the latest published versions of all Items.  The Sitecore User Interface – a website hosted with Sitecore designed for manipulating Sitecore databases – allows CMS users, developers and administrators to maintain the Master Database by default, though administrators can choose to work with other databases using a selector on the Sitecore Task Bar.  Logically, publication is the syndication of Items from the Master Database to the Web Database.