A site is a unique location that contains areas you want inspected. For example, if you manage locations in California and New York, then each location would be a separate site. Users, reports, and permissions can be managed separately at each site.
An area can be anything at the site that you want to inspect. For example, areas can be rooms in a building, cars at a dealership, or areas in a restaurant.
Items are things you are actually grading. For example, the floors in a room, tires on a car, or freezer in a restaurant. Items can be grading on a variety of scales such as Satisfactory/Unsatisfactory, 1-5, etc.