WordPress was originally developed as a relatively simple blogging platform. The ability to also define static pages and to use a variety of themes, widgets and menus makes it usable as a content management system for sites that extend beyond a simple blog. It is the ability to add a large range of plugins to WordPress that is where the real power of WordPress as a content management system lies.
Plugins allow you to extend what WordPress can handle to include almost any type of web site at all. Plugins also allow you to expand on the basic functionality even for the most basic blogging site. There are literally thousands of plugins available that you can use with WordPress to perform all sorts of tasks.
The plugins directory at wordpress.org lists over twenty thousand different plugins for WordPress (to which of course need to be added all those WordPress plugins that exist that are not offered directly through WordPress). The site used to break these up into categories but now so many of the plugins span multiple categories that the plugins are now arranged simply by most pupular, newest, and by tags. The tags give you a somewhat similar way to obtain particular types of plugins to what the categories used to but with far more flexibility as there can be many tags associated with one plugin making it easier to locate relevant plugins.
Plugins are a two edged sword though - while they add extra functionality to WordPress, some of them have not undergone such rigorous security testing as the core components of WordPress have and so it is the plugins that you install that are the most likely place where security holes might be introduced into your web site. This doesn't mean that you shouldn't use plugins but it does mean that you should not install plugins that you don't need.
What you need to do in selecting the plugins to use with your WirdPress site is to install those plugins that are essential for the operation of your site in the way that you needit to work and carefully consider whether you do or don't need plugins that may or may not be useful but where your site can function quite well without them. You should never just install a plugin for the sake of installing it and if you have more than ten to fifteen plugins installed you should take a fresh look at them to decide whether they are all really necessary.
There are a few plugins that almost every site will need.