The galaxy is a Cartesian grid that is randomly generated from game to game. The grid is measured in distance units. The place where everything happens. Players can join and play in multiple games, but are never allowed to play as multiple empires in the same game. The difference between a system's environment and your homeworld's environment.
Habitability also determines the base population growth rate for a colony at that system.
The colony and system that an empire starts the game with. Homeworld are prosperous but not burgeoning. The habitability of an empire's homeworld determines what types of systems that empire will tend to find preferable. Income is equal to the population in production units. War is a continuation of policy by other means.