An IP address may have a specific name associated to it. These names are mostly used for testing and verification purposes. A reverse DNS record is also called PTR-Record. Reverse DNS names are associated and managed by the company that owns the IP address or IP range, usually your internet or hosting provider.
Technically there is no need to set a PTR record at all, but many internet providers assign meaningful names anyway becaue it makes troubleshooting easier. Sometimes the name even contains the abbreviated company name, which gives you an additional clue about the owner. If your internet connection has a static IP address, your internet provider will most likely allow you to set the PTR record yourself, overwriting any internal name that may have been set previously. This name can be freely chosen.
If you operate a private network, reverse DNS entries are often created automatically by your DNS server. This is handy when you inspect IP packets with Wireshark or any other sniffer tool, because IP addresses can be automatically converted to meaningful names by doing a reverse DNS lookup.
Another use case of reverse DNS names is for Email servers. In the fight against spam, email servers often do a reverse DNS lookup of the IP address where an email came from. Ideally the reverse DNS name should contain the domain name of the sender and if it differs, it is an indication that the email sender may be forged.