Slice tool is used to divide an image into sections. This is very useful when you have a design layout for your website and want to slice them to get the same image output as that of the image. There are actually two tools under it: Slice which has the capabilities to divide / slice an image. The other one is Slice Select (from the name itself) which lets you select and modify a sliced section.
I gathered these videos from youtube that will help you understand slicing more:
Slice Tool – Adobe Photoshop
Photoshop Tips – Slice Tool
Aside from those videos above, here is another useful information from Adobe Help Page:Slices are categorized by their content type (Table, Image, No Image) and by the way they are created (user, layer-based, auto). Slices created with the Slice tool are called user slices; slices created from a layer are called layer-based slices. When you create a new user slice or layer-based slice, additional auto slices are generated to account for the remaining areas of the image. In other words, auto slices fill the space in the image that is not defined by user slices or layer-based slices. Auto slices are regenerated every time you add or edit user slices or layer‑based slices. You can convert auto slices to user slices. User slices, layer-based slices, and auto slices look different—user slices and layer-based slices are defined by a solid line, whereas auto slices are defined by a dotted line. In addition, user slices and layer-based slices display a distinct icon. You can choose to show or hide auto slices, which can make your work with user-slices and layer-based slices easier to view. A subslice is a type of auto slice that is generated when you create overlapping slices. Subslices indicate how the image is divided when you save the optimized file. Although subslices are numbered and display a slice symbol, you cannot select or edit them separately from the underlying slice. Subslices are regenerated every time you arrange the stacking order of slices.