Mod

Mod is short for modification, or in this case game modification. Mods are a form of custom content in that they must be downloaded and their file(s) must be placed properly. However, they are not in-game objects such as clothing or new decorative objects, though some mods use an in-game item to enable or disable their features.

This distinguishes them from "hacked objects". Mods mainly alter gameplay values or add/change already existing features. For example you could download a mod that will allow teenagers in your game to WooHoo or become pregnant.

Examples of small mods would be phone plugins for The Sims, mods such as the Less Addictive Espresso Bar mod that affects how strongly an object advertises, or making the homework bar be complete faster.

Example of big mods would be Awesomemod and Macrotastics.

Though the recent inclusion of more menu items available when using Testingcheatsenabled in the more recent Sims games, has made many mods from older games not worth remaking.

Dangers of Using Mods
Using mods could result in corrupt data, save game losses, glitches that are in the severity. And other things alike, that's why it is always good to take extra precautions and backup your save game data, like the whole neighborhoods.

Because some corrupt objects or even the slightest malfunction in the game code could result in one or more of the neighborhoods disappearing, or you would have to re-install your game.