I'm not sure what level of knowledge you have, but iron is the metal ion at the centre of the haemoglobin molecule found in red blood cells. Haemoglobin is essentially one iron ion surrounded by a porphyrin ring. This iron ion can combine with an oxygen molecule, and also with carbon dioxide (useful in the removal of waste products) and carbon monoxide (which is a stronger link than that with oxygen, hence the poisoning risk of carbon monoxide). While some gas can be carried dissolved in the blood, the haemoglobin molecule is essential for the carriage of oxygen to tissue, and also the removal of waste gas to the lungs.
Most people don't need iron tablets, but those who have poor vitamin C intake, or excessive fibre in their diet, along with those on iron-depleting drugs, or with red blood cell/haemoglobin abnormalities which may cause iron-deficiency anaemia can easily supplement iron intake with iron tablets. These are also useful for people who don't get enough iron, particularly vegetarians (the iron in vegetables is far harder to absorb than the iron found in meat).