Raiding is the term for attacking a village. It's only possible at chunin or higher.
In order to raid, you simply travel to another village and attack someone. However, that person can now call for help (and since you're in his village, he'll have a lot of help). This turns it from a single raid to a group raid.
Group raids can consist of just a few people or an entire village. Some people prefer to go on raids alone, and have the opinion that doing so earns more village funds in a smaller amount of time. But group raids can be more effective, to protect fellow raiders, or to intimidate the raided village.
Raiding is voluntary. However, kages will often set kill quotas for ANBU squads, or even normal villagers.
So the question is, what good does it do? Well, raiding is what helps your village (and ANBU squad!) the most. Raiding is what brings in village funds. A village cannot improve if they don't have village funds and a village can't get Village Funds without good raiders!
Raiding also increases your own regeneration through PvP experience.
Just like everything else, raiding can be difficult at first. Often, it comes down to luck and timing. Mostly luck.
Some would recommend that you do not raid until you can get five or more kills easily, while others say that it's good experience and helps your village. It's your call in the end. Though, if you're nervous, try going on a raid with a stronger friend first!
First, you'll want to withdraw enough money for 2-3 hospital bills. When you leave your village, you'll have to travel to your raiding destination. You will likely run into some AI. These should be easy opponents and, if they're not, you may want to consider putting in some more time training next time.
If you live in the villages of Shroud, Konoki, or Silence, you can use the Void to get you there safely and encounter no AI! To use the Void, you travel along the lines of (X, 0) or (0, Y).
Now that you're at your destination (or right next to it), it's time to do some quick clicking. (This is where Bookmarks or extra tabs come in handy.) Go to “Combat” and find the weakest person you can attack and go for it! You can also open “Scout Area” in another tab or window and travel away from the village. This way, you can more closely examine who you can attack before you might get attacked right back.
The following guides will hopefully give you an idea of how you can raid or avoid raids better. Veterans use these techniques frequently and results will vary between players.