Bots are simply semi-autonomous automation software, either run through IRC clients that have scripting capability or from stand-alone packages. Undernet has X, which is their Channel Service bot. It provides basic channel management services including user levels for channel management and the ability to maintain ban lists. You can register with CService and get your own Undernet user name, which can be very helpful.
Bots are commonly associated with IRC in two primary ways. The first way is helpful bots that assist Ops with channel management, providing various utilities, and even providing games. The other type of bot is malicious, and is used for harrassing users, flooding channels, Denial-Of-Service attacks, attempting to take over IRC Channels, and delivering malicious payloads, like child porn, trojans, viruses and other malware.
Many channels use the Eggdrop Bot to provide channel protection and management services. The channel owner or manager can set up an Eggdrop Bot to hold the channel open when no Ops are available, it provides user levels for Ops and Users, and has quite a few built-in channel protection functions to help combat flooders and spammers, etc. Eggdrop can be extended using numerous 3rd party scripts for just about any purpose including games, utilities like Ping and Seen, and extensive scripts proving extremely efficient channel protection functionality like BlackTools.