Wire strippers are one of those tools that very much do what they say on the tin. That is to say that they are designed to strip wires, in this case they strip the plastic casing from the outside of electrical wires.
There are a number of reasons why you may like to strip the casing from a wire, such as to attach it to a terminal, to splice with another wire or when performing rewiring of an electrical system.
Whilst there are a while range of ways to get that plastic casing off the wire such as biting it off or using a pocketknife, an electric wire stripper is faster, safer and more accurate. It will protect your from harm (especially if you are in the habit of stripping wire with your teeth!) and it will protect the wire itself from damage, promoting a better connection to terminals or when splicing.