An Environment is a logically grouped set of containers distributed across one or multiple peers that share the same network (they belong to the same p2p swarm - see more on *p2p*). An Environment can host a number of applications.
Environments are based on templates - basic software packages that provide a set of functionalities and can be extended to whatever you may need. For instance, there are templates that allow you to deploy a Debian server image to a Subutai Environment. You can use the templates already available in the PeerOS and Bazaar, or even create your own: