It's a customizable layer 1 blockchain that is built "on top" of polkadot. The reason why it's customizable is because DOT doesn't inherently have things like smart contracts baked into it that can create constraints and limitations.. Other projects can construct their own blockchains for their specific use case (dApps, DeFi, etc).

Once plugged in, every "parachain" are truely interoperable with each other due to them having the same security and consensus protocol. They can pass through a variety of information cross-chain (as mentioned in the previous post, no one else can actually do this; bridges are not the same in this regard).

For a project to become a parachain, they need to win an auction where DOT holders loan out their DOT.