See here for general information about backups: #dic:backup
A Nandroid backup is a backup of all (FP1) or most (FP2) partitions on your phone. This is useful if you are experimenting with your operating system or want to try out an alternative OS (see #oslist). Only #dic:customrecovery’s can perform Nandroid backups.
Note that TWRP on FP2 excludes the data partition, which means that you will have to backup photos, music, etc. manually.