I couldn't have said it better myself.
Droids (sometimes also 'droids, short for androids), were robots: mechanical beings, often possessing artificial intelligence. They were used in a variety of roles and environments, often those considered too menial or too dangerous for Humans and other species. Droids were also used in fields that required extensive specialization and knowledge, such as medical droids and astromech droids.
Depending on the model and its corresponding purpose, droids were totally obedient, rugged, expendable, capable of vast memory recall, and mathematically precise. These characteristics made them well suited for many jobs, though the lack of independent thought in the cheaper, less advanced models limited their capability. This lack of autonomy was simultaneously a vast asset and a glaring weakness—an asset in terms of obedience and control but a massive drawback in terms of effectiveness. Designers faced a fundamental paradox—make the droids overly intelligent, and they might rebel; yet make the droids not intelligent enough and they would be ineffectual.
Customarily, droid names were an arrangement of numbers and letters.