They're character encoders.
A character encoding system consists of a code that pairs each character from a given repertoire with something else, such as a sequence of natural numbers, octets or electrical pulses, in order to facilitate the transmission of data (generally numbers and/or text) through telecommunication networks or storage of text in computers.
Click here for information.
UTF-8 is the byte-oriented encoding form of Unicode.
More about UTF here
Different encoding have different purposes. It’s best to leave it to Auto-select .