A dataset is a simple collection of data, usually presented in a table. You can use a dataset as the basis for your story, and as a data source for Smart Predict. Datasets are a good choice when you want to create stories quickly and do not want to get into structure definition or when development does not demand IT governance.
For the most part, datasets acquire data via import connections. The only exception is that a dataset can be built based on a live connection to a HANA data repository.