Your Inventory is where your character keeps all of their equipment, rations, and other items that they carry with them on adventures. There is no strict definition of what type of container your equipment is kept in. Most characters use a backpack to represent it, but any type of container can work so long as the items are carried on your person. Your inventory is distinct from worn items, which are items carried in easily-accessible spots on your body, such as your pockets.
There is no limit to the number of items you can carry, but your carry weight defines the maximum weight of your equipment. Most small items have a weight of zero, but larger or bulkier items such as weapons typically have an amount of weight. If the total weight of all items in your inventory, worn, and in your hands exceeds your carry weight, you become overencumbered. If it exceeds double your carry weight, you become incapacitated.