A codec is the mechanism that encodes (compresses) audio or video data and decodes it for playback. In audio, MP3, AAC, FLAC, and Opus are codecs. Codecs and file formats such as WAV or M4A are separate things.
Where the name comes from and what it does
Codec is short for coder-decoder, or compressor-decompressor. It handles turning recorded PCM into smaller data, and turning that data back into sound you can play.
Think of it separately from the file format
The file format decides how the audio data, metadata such as track titles, and information about the file are stored. M4A, for instance, is a file format that may contain AAC. WAV is also a wrapper, generally used with PCM inside. Do not assume the internal scheme from the extension alone.
Lossless and lossy
A lossless codec such as FLAC decodes back to exactly the same PCM data. Lossy codecs such as MP3, AAC, and Opus reduce some information in order to make files smaller. Neither is superior; choose by balancing your purpose, whether editing, archiving, sharing, or streaming, against file size.
Check what the destination supports
Even with the same codec, playback devices, browsers, video editors, and streaming services accept different wrappers and settings. For delivery and publishing, follow the extension, sample rate, channel count, and bitrate the recipient specifies. Being able to convert is not the same as being able to play or edit the file as it is.
Keep the source you convert from
Repeatedly converting between lossy codecs such as MP3 and AAC can reduce the information further. Keep the WAV and the project that serve as your production reference, and create files for each purpose from them. You can choose a format and codec and convert with the audio format converter tool.
