An escrow account is an account held by a third party that enables the original two parties to be safe from the other taking monies in it.
In a mortgage situation, an escrow account is usually required by lenders. Once the walk-through, home inspection and other pre-purchase actions are complete, the money is released from escrow on the home purchase date.
If you elected to include items like your insurance (property and PMI) and taxes in your mortgage payments, you will use an escrow account. Your escrow account will build up monthly payments up to the point that these fees are required to be paid.