The reason why CAPTCHA is used can be understood easily.
Suppose let us assume you're a celebrity and living in tier-1 city in India. Now there are lot of people wanting to meet you either to take a photo or to get your signature or just to have a glimpse of you. Being a celebrity, you and your family are constantly surrounded by fans, be it your house or you're shooting spot. So you decided to build a house in such a way that the fans cannot enter your house nor see anything that is happening inside your house. You made this possible by building a big compound surrounding your building and building a big iron gate to prevent people from entering your house. But after some time your realized that, though having a big compound with an equally big gate, people somehow manages to overcome that huge barrier and get into your house to have a glimpse of you. Being annoyed by having people disturb your personal space, you decided to take the next step on how to prevent people from coming into your house. You then decided to install a CCTV camera along with some security people to make sure no one enters and if someone does, there are securities to take care of them. Now assuming you made a blockbuster movie and it was such a hit that the people who watched the movie loved you more than ever, they, whatever the consequences be, will somehow try to get a glimpse of you. But, you not knowing this decided to go for the celebration of your successful movie with the film crew and you appointed a meeting at, say 6. The fans who are in a position to do anything to just see you waits outside your gate to have a slight glimpse of you and some even decided to get into your house to have a special peak of how your lifestyle is. But since you have the security to take care of this issue, the security prevents people from getting in and also helps to clear the area outside your house. Now assuming you have no security , there would have been this problem of not being able to get out of your gate due to huge presence of your fans and thus getting late to your celebration and having the fear that someone might break into your house if they get into your compound. So both these issues are being solved by just having security.
Now this is no different from what you've asked. Here
Website is the house.
Bots are your fans.
CAPTCHA is your security.
So when the website became popular , there are lot of people creating multiple bots which will attack the server repeatedly. This as clearly said by Bhavdeep, will fill out the application forms randomly or randomly trying out various username and passwords and thus slowing down the website just like the people who slows you down from attend your Movie celebration by crowding your place. The CAPTCHA here is the security which prevents this from happening. The CAPTCHA is designed in a way such that the bots won't be able to read them and thus successfully preventing these bots from entering the website or filling out data.
Now you might ask why wont they implement any secure protocols while building the website to prevent bots from attacking any website rather than asking us to enter the CAPTCHA everytime.
The answer in short, they do install all security measures but these securities are nothing but the compounds surrounding your building. No matter how tall you build, there will always be people who can get over the compound. So there's this need of a security person to prevent this from happening and that security person is the CAPTCHA for websites. Thus by preventing the bots from entering your website, you get to have a fast browsing experience whenever you browse that website and prevent manipulating data by filling out application forms randomly.
