Background
Your background represents what your character did prior to becoming an adventurer.
Mechanically, this let's you choose one Primary Ability associated with your background and determines the miscellaneous knowledge the character has.
Language
You learn 1 Language from your background besides common, which all PCs know.
If your background was in Intelligence, you may known up to 3 Languages.
Flavor
Your background can be whatever you want, so long as the GM deems it reasonable for the campaign and a 1st level character. This flavor is used to determine what knowledge your character would have in-world.
A Scholar would know a lot about history and recent events, while a Street Kid would know who the power players in the undercity are.
Feel free to make a custom background, or find a random table that you like and roll for one.
See Example Backgrounds.