It feeds bits of text into a neural network in the form of vectors, and also covers the concept of documents in text processing.
In natural-language processing, a document or sentence is typically used to encapsulate a context which an algorithm should learn.
A few examples include analyzing Tweets and full-blown news articles. The purpose of the sentence iterator is to divide text into processable bits. Note the sentence iterator is input agnostic. So bits of text (a document) can come from a file system, the Twitter API or Hadoop.
Depending on how input is processed, the output of a sentence iterator will then be passed to a tokenizer for the processing of individual tokens, which are usually words, but could also be ngrams, skipgrams or other units. The tokenizer is created on a per-sentence basis by a tokenizer factory. The tokenizer factory is what is passed into a text-processing vectorizer.