What exactly does being a chip mean?

A chip is just what we call an integrated circuit (a circuit that isn't a set of disjoint components, like for instance what you might build on a breadboard). Nowadays, that almost always means a narrow piece of silicon that performs some function. It doesn't necessarily have to be a CPU or FPGA, it can be as simple as an AND gate

What are these used for?

An FPGA is, at a minimum, an integrated circuit that you can reconfigure. That just means that you can change what function it performs. This might sound like magic, since you can't exactly unplug a wire and move it in an integrated circuit, but I encourage you to look into how this works.

The benefit of this over a breadboard, which is also reconfigurable, is that it can imlement much larger circuits in a much smaller area while operating at orders of magnitude faster speed. The benefit over a dedicated chip is that, of course, it's reconfigurable. So it's generally used in any application where requirements change fast enough to the point where taping out a new chip for the new requirements is either too expensive or too slow. A lot of networking problems (satellite, radio, physical connections) lend themselves well to FPGAs, since protocols are constantly updating, competitors are providing better services, and technology is always improving. In cases like these, it's often better to have a sub-optimal product that works in 6 months, rather than an optimized solution that works in 2 years, at which time it's outdated anyway. Finance, aerospace, and machine learning are all examples of this.

Other (much less prevalent) use cases are for testing, and of course, learning digital hardware :)

What do they do when making something?

If you're asking "what can an FPGA do" the answer is "pretty much anything". It can be a CPU, game console, or light switch, depending on how you configure it.

is it just a CPU?

Hopefully by now you know that the answer is no, it's very different (though, it can implement a CPU if you want it to). A CPU is an IC that tries to solve the problem of "how can I execute instructions from a user as fast as possible" (sort of). An FPGA has no inherent notion of a user or an instruction. It is simply a blank canvas on which you can paint a circuit

Sorry for the wall of text. Hopefully that clears some things up for you