A moderator, or Mod, is a live stream viewer who watches the chat. They can timeout or ban users who are behaving inappropriately. It is a big help to the live streamer who can’t entertain and moderate the chat at the same time, especially if they have thousands of viewers.
Most Twitch mods are volunteers who are just happy to support the channel. Sometimes streamers will reward their mods with free subs or merchandise, and successful streamers sometimes provide payment, but it is not required.