Most users do not need to enable this feature but if your server does require you to use FTP and you are having file permissions errors, you will need to use this.

Below are the instructions Joomla 3 gives on enabling FTP:

Enable FTP:

Enable the built in FTP (File Transfer Protocol) functionality which is needed in some server environments to be used instead of the normal upload functionality of Joomla!

To configure FTP settings within Joomla 3:

First log into your Joomla 3 administrative dashboard > click on the Global Configuration link > in the list of tabs towards the top of the page, click the tab labelled Server > Find the FTP Settings section, and enter the following details:

• Enable FTP. Decide whether or not to enable FTP within Joomla 3
• Enter your FTP hostname. If you are using a localhost the hostname is likely to be localhost
• FTP Port, the default FTP port is 21, most users will not need to change this setting
• Enter your FTP username
• Enter the password for your FTP account
• Enter the FTP Root (this is the path to your Joomla 3 files)

When you have finished entering in your settings, click the Save button in the top left of the page.