The world of the 1800s had begun to become a lot more cosmopolitan than in the past — people moving around from one country to another, often because they were looking for work. Before the Industrial Age, most people didn’t need to “look for work” because there were no factories, and most people lived in rural areas with farms or small shops.
Because people of so many different religions and ethnicities were moving around, and emigration and immigration became an important characteristic of this age, Victoria 2 models it by using “POPs” — units of like-cultured, like-employed population which enable you to deal with this group of people together (and allows them to deal with you).
Each POP has its own culture, belief systems, and political opinions. They have policies they want your government to support, and if you don’t support them, they’ll get mad. They also need money, in order to buy their various needs. If they can’t buy things they want, they get mad and might move. If they are too poor to buy things they really need, they may move or starve.
Usually, a POP is a resource you can use to work your factories or gather resources (at farms or mines, etc.).
There are different types of POPs, to represent different roles in society. There are Aristocrats, Clergy, Craftsmen, Clerks, and Bureaucrats, among others. Bureaucrats run the government offices. Soldiers and Officers serve in the army or navy. Craftsmen work in factories, as do Clerks, but Clerks add to the efficiency of the factory. So do the Capitalists who build them!
POPs of one type can either promote or devolve into a different type, depending on whether they have extra money or not enough.