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Molluscum contagiosum is a type of wart, which means it is a viral infection of the skin which induces a benign tumor formation. It is an odd little hard bump about one or two sixteenths of an inch or so in diameter (2- to 5-mm) that appears on the skin of children and adults. Sometimes you will notice that the center of the thing is depressed ("umbilicated," like the navel).The things wouldn't be much trouble except for their tendency to spread and create concern in the parents.
It spreads by "autoinoculation" - by scratching or by touching a lesion, and transferring the virus from location to location. They are usually found on the trunk and arms, and in the armpits. Genital area involvement is seen more often in adults; genital molluscum contagiosum may be a sign of sexual abuse in children. Unlike ordinary warts, the palms and soles are not involved. Lesions may spread to inflamed skin, such as areas of eczema. The lesions themselves may have an area of redness around them if the child has been scratching.
And like all forms of warts, eventually* they disappear spontaneously. Most of these little warts are clear spontaneously in 6 to 9 months; however, they may last much longer. Dermatologists can apply slightly caustic chemicals that literally blister them off, but I usually advise parents to wait and see unless the things are spreading rapidly or the tension level is too high.
If treatment is desired, the goal in children is of course to get rid of the things without undue discomfort or scarring. There are a number of therapies available that more or less meet those criteria.
*eventually "But eventually we are all dead!" - John Maynard Keynes, economist and sage