What is ISO file?

The name ISO is taken from the ISO 9660 file system used with CD-ROM media, but an ISO image can also contain UDF file system because UDF is backward-compatible with ISO 9660.

An ISO file contains the image of a disk, meaning that it contains every file and folder that the disk had. An ISO is a byte-for-byte copy of the low-level data actually stored on a disk (raw data).