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Bias binding is a strip of fabric that has been cut on the bias line of fabric which is a 45° angle from the direction of the selvedge edge or fabric weave. The edges are folded towards the underside so that if you fold the bias binding in half over the edge of a piece of fabric, all raw edges are hidden inside.
Bias binding is not only great for covering up unsightly raw edges but it also protects the edges. It not only is a great alternative to overlocking to stop fraying, but it also adds structural support. For example to necklines and armholes where clothing is frequently pulled around, the bias binding adds strength to the edge and helps to prevent stretching and distortion.
Bias binding typically comes pre-starched which makes it easier to position the binding around fabric edges, and so making it easier to sew with. This means that it will feel stiffer when you receive it but it will soften up after washing.
Bias binding width is measured between the fold on either side of the binding, not the full width if you were to unfold the raw edges out.