Webpack is a javascript module builder. It is used to compile a modern javascript modules. Webapack process our application. Webpack only understand javascript file and JSON file. It internally build depandency graph (depandency graph:- any time one file depants on another, webpack handle all the depandencies) from one or more bundles. that include every modules in our application.
When webpack process our application. It start from list of module define on the command line or configuration file. And it internally builds a depandancy graph one or more entry point. Then it combine every modules and bundle the essential one.
References :- https://webpack.js.org/guides/getting-started/