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FTP (File Transfer Protocol)

FTP (File Transfer Protocol) is a protocol used to transfer and manipulate files over a network that supports TCP/IP such as the internet, the transferring operation needs two computers one is called the server and the other one is the client (in web hosting the server is your web host and the client is you). On each computer there is FTP software (on the server and the client) the server waits for requests from the client side to make a connection between them.
Port 21 over TCP is used to establish a control channel connection; this connection is only used to exchange information between the server and the client. To transfer data, another connection is established, if it's an active connection, the server binds on port 20 before connecting to the client, but if it's passive connection there is no need for binding.
Data is sent using two modes binary or ASCII

Anonymous FTP
Anonymous FTP allows anyone to access a remote server and download files from there without asking for authentication, sometimes when username is required you just need to enter "anonymous" and password would be your email address if asked.

Security problem
Anyone can intercept your files and password and read them when using the FTP, because FTP does not encrypt files when transferring them. To make things safer and encrypted a secure kind of FTP was developed.
SFTP (SSH File Transfer Protocol) also called SecureFTP and FTPS which is FTP run over SSL. These two kinds work in different manners but they both encrypt data before transferring it.