What is LaTeX?
LaTeX is a markup-based tool to create documents. The main difference between LaTeX and a text-processing program like Word, LibreOffice or Pages, is that the LaTeX users enter plain text, without formatting, and the formatting is done by a LaTeX compiler. It separates the document from the style, so it is easier to change the appearance of the document. LaTeX files are .tex files, and include commands.
LaTeX is particularly convenient for mathematical expressions. This is why researchers using maths (mathematicians, economists, physicists and more) usually adopt it. You can learn more here.
Referencing without pain
Several additional tools have been created to make the use of LaTeX (slightly) easier. One of them, called BibTeX, was built to help users to cite their sources.