Production is the actual filming of the video. The video production company you’re working with bring their crew, equipment, talent (actors) and all necessary props out to the location and capture all the footage necessary.
If you’re adding elements such as motion graphics, animation or voice-overs in your video, the material will be produced in the production stage.
The quality of footage you receive in production can not be corrected in post production, so make sure the footage from production is the highest quality footage you can get!