Plugins add features and functions to WordPress websites. Plugins provide flexibility and extensibility by adding things like contact forms, lightboxes, sliders, and backup capabilities. Widgets are sections of content or navigation that can be placed in sidebars or footers, and some widgets are provided by plugins. While plugins add functionality, they can potentially slow down a site if too many are used, and may require updates to remain compatible. The document provides examples of specific plugins like Exifography, Taxonomy Converter, Post Table of Contents, and Recipe Markup.