Just what are blocks and how are they used on a layout?
Blocks indicate sections of track that are controlled by a given power supply/controller. They allow you to control more than one train at a time. Under command control, blocks take on an additional meaning of a way to distribute power. In this case, they are called power districts. An example would be to assign a block to each loop on a layout and a block to a yard.
Blocks are sections of track with the center rail pin pulled and replaced with a fiber (plastic) pin. This isolates that track section from the power in the tracks before and after it, and this allow you to control that section of track voltage independently.
A good example are dead end sidings or spurs where you park trains. You put a fiber pin in the center rail just after the switch used for the siding. This center fiber pin isolates the siding/spur from the power on the rest of the layout. To give that siding/spur track power you need to have some type of switch (toggle, rotary) or a dedicated transformer. You move your train onto the spur/siding and you can now cut or reduce power on the siding/spur to park it, but still have power on the main line.
Peter H. Riddle’s books, “Greenberg’s Wiring Your Lionel Layout” vols. 1 & 2 cover this topic with drawings and practicle examples. They are good books if you don’t have them.