A schema is a pattern of memory that is heavily influenced by pre-clustered ideas, and is known as the framework that organizes social information. Schemas are often used to interpret and learn information, as we are more likely to comprehend what we learn if it matches our schema. For example, if we always know that grass is green, then we will be able to comprehend the fact that the grass in Texas is also green much better than the (not-so-true) fact that the grass in New Mexico is purple: because purple grass does not match our schema of grass.
Another thing schema causes is stereotypes, or the idea that certain groups will have certain traits in common. This is because our schema of the particular group that we envision has been influenced by social/cultural norms. However, the most notable and fascinating thing that schema does is the distortion of memory. In the 1980s, psychologists Brewer and Treyens conducted an experiment, where participants were asked to wait in a waiting room that resembled an office (these participants were under the impression that they were waiting for an experiment, when in reality, the waiting room was the experiment). After a brief period of time in the waiting room, the participants were asked to name items that were in the waiting room. A lot of things were recognized correctly, but things that normally did not appear in an office were not recognized.
Even more interestingly, participants seemed to recall things that normally appeared in the office, but actually were not there at all. For example, many participants recalled seeing books in the office, even though there were no books in the office. That is attributed to the fact that there are usually books in offices. This area of psychology is very fascinating, and helps us understand human behavior better.