In the generic sense a locale "represents a specific geographical, political, or cultural region[1]" which usually has unique ways to display date, time, currency, and special characters.
For example, in order for a user to use an application in chile and south carolina, the user must be able to select his locale. The application then modifies the way it displays data to the user. I have run into this many times at work when writing POS software for customers in mexico and south america.
I've found alot of information (specifically to kde) at
http://i18n.kde.org
Here's the i18n mailing archive for XFree86:
http://www.xfree86.org/pipermail/i18n/
Hope this helps!
[1] java.util.Locale - Java 1.1.8 documentation