General settings of all the modules, either core or third party.
Configurations is a system where all the general settings of the modules can be managed. This includes the core and third part modules. The configuration link can be found within "System" menu. All the core and third party modules can append their settings page by creating a file system.xml
in app/code/{code pool}/{namespace}/{Module name}/etc/
This tag can be used for the questions related to the issues of configurations.