An inventory is a list of all the items at the property noting the condition of all the furniture, fixtures, fittings and effects which are to be left at the property for the duration of the tenancy and for the tenant's responsibility and safekeeping.
This should be supplied by the landlord at the beginning of the tenancy and should list each room noting what is in that room.
Ideally this should be checked at the time of occupying with the landlord, making a note of things such as decoration, whether there are any cracked sockets or any defects and making sure that both yourself and the landlord agree on it and sign it. Taking photographs is a very good method of avoiding disputes.
Your landlord will ask you for a bond at the beginning of your tenancy. This bond is to cover things such as any damage to the property or contents while you are living in the property. By making this list, the "inventory", when it comes to the end of your tenancy, you both have proof of what was originally in the rooms and the condition they were in.