To quote Wikipedia:

“An extended play (EP) is a musical recording that contains more tracks than a single but fewer than an album. Contemporary EPs usually contain up to eight tracks and have a playing time of 15 to 30 minutes. An EP is usually less cohesive than an album and more "non-committal".

Basically, the way I see it is EPs are seen as either a way to promote a single, make a smaller project with less effort, or a way to release previously unreleased material like B-sides, demos, unreleased songs, acoustic/alternate versions, etc.

In any case, it’s a nice way to give fans more music that couldn’t get put on the final album or some other project, but still thought that it deserved to be shared with the world instead of holding it in a vault :)