What is meant by the policy of "Containment" and why was it important during the Cold War years?

During the latter stages of the Second World War, the United States and Soviet Union, ultimately victorious allies, began their long descent and transformed into polar adversaries in the Cold War.  "Containment" was advanced by the US as a remedial policy to the "Domino Theory," whereby a non Communist or Socialist state, influenced by the Soviet Union, would turn Communist, and prepare the transition to its bordering neighbors.  Communism would then continue to spread around the world.  George F. Kennan (1904 - 2005) both a diplomat and adviser on Soviet affairs, suggested a policy of Containment in lieu of overt conflict with the Soviets, or a "Hot" War.  The competing ideologies of Soviet and American were fought instead within the world's countries, each side seeking political and economic influence within the country and supplying it militarily.  One manifestation of this policy came in the form of "foreign aid" under the Truman Doctrine of 1947;  the first two US beneficiaries were Turkey and Greece, where Communist influence had been growing since the conclusion of World War II.

Later in the Cold War, the term began to be applied towards areas where hostilities had broken out; "Containment" of the Communist threat became the byword during the early days of the US involvement in Vietnam.