Parties are any one to or from whom a transaction is made. Whenever you enter a new name in the "To" or "From" field of a transaction, the name is added to the list of parties. Parties can also be added from the Parties Screen.
Parties are useful for several reasons. They help you keep track of where transactions are coming from and going to. They allow you to more easily search your transactions. Finally, they can be used in Budget Rules to help to automate the budgeting of your money. Click here to learn more about how parties can be used in Budget Rules.
See also: The Parties Screen, Budget Rules