gpedit is the Group Policy Editor, basically an administrative tool allowing admins to define settings and configuration on a PC or user basis that will automatically be applied when the PC boots up or the user logs in, overriding the registry settings, but also be removed when the user logs out / PC shuts down.
It is an advance on System Policies which shipped pre Win2k / XP, they had a similar idea but updated the regisrty, this caused problems as when a user logged out the system policy wasn't removed.