The scalar channel contains a 3d grid. It's size is usually determined by the framework and is extensively used in smoke simulations but also liquids can use them and in the end it's just a grid that you can fill with any data you want to!

The grid is made up of grid cells. Each grid cell stores a scalar (floating point) value.
The grid dynamically adapts to the size of an available dynamics simulation node and can be advected in time and space by a velocity field (usually fluid dynamics).