A placebo is a necessary medical practice even though it does nothing to your body. The mind and body are strange and they can be influenced. A Placebo can be a variety of things, none of which adds any therapeutic value. Most come in the form of Sugar Pills or as a Saline injection. On their own they will be nothing. However, a medical professional tells the subject that they are a certain type of drug or medicine, and what the effects of it are, in many cases this comes to pass in the patient.
A good a fictional but fact based example of this appeared in the show M#A#S#H. The Doctors were low on painkillers and a series of casualties had just come in. The less serious, but no less painful cases were given a sugar tablet and told that it was an extremely powerful pain reliever that had just been made available. As a result some of the troops even fell asleep.
The Placebo is used primarily in medical testing to see if a drug is effective. In testing there are three groups. One group has no treatment, one has the actual proposed drug and the third group has a placebo. The subjects are not told whether they are taking the actual drug or not as this affects the efficacy. One thing that is not a placebo is one of the Home StI kits Greenwich provides.