The Site Collections module is used as a SharePoint data store. A site collection is a grouping of websites under a common top-level site that have the same owner and share administration settings, for example, permissions. When you create a site collection, a top-level site is automatically created in the site collection. You can then create one or more subsites below the top-level site.
Classic SharePoint architecture is built on a hierarchical system of site collections and sub sites with defined interrelations.
In the modern SharePoint experience, every site is a site collection and can all be associated with a hub site, making the architecture more flexible and adaptive to changes.