iCloud Keychain is Apple's attempt to make a basic level of password management available to the mainstream. With it, your account names, passwords, and credit cards numbers can be stored in iCloud, and synced across all iOS 7 and OS OS X Mavericks devices that are logged in under the same Apple ID.
In conjunction with Safari, it can also generate new, unique passwords, and autofill them when and as needed. All with 256-bit AES encryption. There are some pros and cons to using iCloud Keychain. It's easy, it's convenient, and it's built right in. But, it doesn't offer a separate master password option, so once you unlock your device, anyone you hand it to can access all your passwords and credit cards. Also, the passwords it generates aren't particularly strong. Still, for most people, most of the time, iCloud Keychain is far, far, better than nothing.