Your application is a collection of "Activities".

A very simple app may only have one activity. It basically encompasses a single Use Case, I guess you could say.

You want to break up what the application does into basic Activities. This is useful on small devices because they need to be efficient with Hardware resources.

So the app starts an Activity, and the Activity loads a Layout (defined in XML) which usually has a bunch of Views on it. Views are the UI components.

So you've got Application -> then Activity -> then Layout -> then View.

The application is pretty much defined in XML.

The Activity is a JAVA class.

The Layout is defined in XML.

And the Views are JAVA classes.

It confused the hell out of me for a while. But after a bit of practice it makes sense and it flexible and powerful enough to do whatever you need, it seems.