The border basically. Its a place that they check packages, etc...
Yeah, that's the basic gist of customs. It's the agency in place at the border of any country that screens incoming international shipments to make sure nothing illegal or contraband get into the country. When I send away hair samples for genetic testing, I have to include an import permit, stating what it is with a signed declaration of health so that it will make it through customs. People flying internationally have to go through customs & immigration as well.
There are some pretty funny things that can't be shipped between Canada and the US though. An example is Kinder Surprise. It's banned in the US but not in Canada and every once in a while, you'll hear a story about someone who had their Kinder Surprise confiscated at the border.