What is a stream in the programming world? Why do we need it?
Kindly explain with the help of an analogy, if possible.
A stream represents a sequence of objects (usually bytes, but not necessarily so), which can be accessed in sequential order. Typical operations on a stream:
A particular stream might support reading (in which case it is an "input stream"), writing ("output stream") or both. Not all streams are seekable.
Push back is fairly rare, but you can always add it to a stream by wrapping the real input stream in another input stream that holds an internal buffer. Reads come from the buffer, and if you push back then data is placed in the buffer. If there's nothing in the buffer then the push back stream reads from the real stream. This is a simple example of a "stream adaptor": it sits on the "end" of an input stream, it is an input stream itself, and it does something extra that the original stream didn't.
Stream is a useful abstraction because it can describe files (which are really arrays, hence seek is straightforward) but also terminal input/output (which is not seekable unless buffered), sockets, serial ports, etc. So you can write code which says either "I want some data, and I don't care where it comes from or how it got here", or "I'll produce some data, and it's entirely up to my caller what happens to it". The former takes an input stream parameter, the latter takes an output stream parameter.
Best analogy I can think of is that a stream is a conveyor belt coming towards you or leading away from you (or sometimes both). You take stuff off an input stream, you put stuff on an output stream. Some conveyors you can think of as coming out of a hole in the wall - they aren't seekable, reading or writing is a one-time-only deal. Some conveyors are laid out in front of you, and you can move along choosing whereabouts in the stream you want to read/write - that's seeking.
As IRBMe says, though, it's best to think of a stream in terms of the operations it offers (which vary from implementation to implementation, but have a lot in common) rather than by a physical analogy. Streams are "things you can read or write". When you start connecting up stream adaptors, you can think of them as a box with a conveyor in, and a conveyor out, that you connect to other streams and then the box performs some transformation on the data (zipping it, or changing UNIX linefeeds to DOS ones, or whatever). Pipes are another thorough test of the metaphor: that's where you create a pair of streams such that anything you write into one can be read out of the other. Think wormholes :-)