I can try to explain, though I'm a bit exhausted at present so I apologize if anything I say is incoherent.
Could anyone explain an OC to me?
An OC (original character) is a character that someone has created themselves. They're normally given a back story, a detailed appearance, and personality traits.
What are they used for?
Many things! Some people create stories around them or use them for RPing, while others have "personas" or OCs that are somehow reminiscent of themselves (like an alter ego of sorts). I've also encountered people who just like to look at art of their OCs and don't really "use" them for anything other than appreciating them for aesthetic purposes.
How do I create one?
Just use your imagination. You can essentially base an OC off of anything that inspires you. There are also many artists who design OCs and put them up for a sort of adoption, where a buyer would pay to have the OC and all rights to the design. I've also seen people create an "OC" from a preset base or chibi maker, but I hesitate to call those a genuine OC due to the fact that it's not their original idea.
Are there any requirements to an OC?
Definitely not. Only those that exist within the boundaries of your mind, and of course it must be YOUR original design or adopted by you.