A permalink is the URL that points at a specific post, page or archive. The permalink structure, set once under Settings, is the pattern WordPress uses to build them.
Which structure to choose
Post name is the sensible default for almost every site: short, readable, and it does not go stale the way a date-based URL does. Date structures make sense for news sites where the publication date is part of how readers navigate.
Changing it later
Changing the structure on an established site changes every URL at once, which breaks incoming links and loses the ranking attached to them. If you have to do it, set up redirects from the old URLs first. Deciding this on day one costs nothing; deciding it in year two costs a weekend.