Customer Accounts define your Customer and End User relationships to your products, the number of licenses they are allowed to use, restrictions for use (e.g. time, domain, user) and much more.
It is best to create customers as CHILDREN of your MASTER ACCOUNT for better hierarchal management of the license relationships (moving licenses up and down the hierarchy). Customer Accounts can have sub-Customer Accounts, and those in turn can also have sub-Customer Accounts. There are many reasons for why you would want do do this - Reseller Relationships, or Departments inside a large corporation.
Customers Accounts can be either literally interpreted as your "Customer", or may be interpreted as a "Reseller" that you are selling a block of licenses to form which they will distribute to their customers below them.
This is a powerful capability which you should carefully understand and plan for taking advantage of