ISO controls the level of sensitivity to light.
The lower the ISO the less sensitive it is to light. Accordingly, the higher the ISO the more sensitive it is to light. So you would use a lower ISO like 100, in bright daylight. On the other hand if you only have a limited amount of light to work with, such as when shooting indoors or at night, you can up the ISO.
However, it’s better to keep the ISO as low as possible since footage will become noisier at higher ISO levels. Before shooting important footage, run some tests on your camera to find out what are the optimal ISO levels. If your camera will allow it, some picture styles work best with ISO levels that are increments of 160.
In the above picture, Images were captured at the various ISO levels with the lens cap on. With the magnification increased and a few curve adjustments you can see that more noise occurs at higher ISO levels.
I’ve also run the test on video footage using the Canon SL1:
Why do higher ISO levels produce more noise?
In low light, your camera is only getting a small signal so it needs to amplify this signal which in turn introduces distortion. This is similar to when you play music on a stereo. If you pump up the volume to it’s highest settings you’ll notice there is more distortion, and the quality of the music doesn’t sound as great. Which is better I guess, that way you won’t annoy the neighbors with your music blasting.