1 - Android basics
ROM: it is the firmwire similar to Windows on PC, in Android world we have the ''stock ROM'' which is the ROM that comes built in, we have ''custom ROMS'' which are built by developers bringing lot of customizations, and ''cooked ROMS'' which are custom ROMS on which we add apps and settings as we want.
Kernel: it is the interface between hardware and software, used to modify hardware drivers as wifi, battery, CPU overclocking and undervolting.
Radio: it changes the baseband of the phone, though not recommended to be changed because they could brick your phone.
Rooting: it is a process that allows users to attain privileged control (known as "root access" or superuser su) which allows installing specific apps, custom ROMs, kernels etc.
Recovery Mode (recovery.img): it is a special piece of software that gives you access to administrative functions, such as installing the base system (ROM), making backups, and performing a 'factory reset'.
Android SDK: it is a free app for windows that is essential to use ADB and fastboot.
ADB: it is a DOS command that can be used within android sdk when the phone is in normal USB mode, mainly used to copy/pasting system files.
Fastboot: it is an ADB command that takes the phone into fastboot mode, can be used to unlock bootloaders.
Refer this for details.
2 - Setting up Android SDK and using ADB
Refer to this topic for details, guide videos and commands. Though most of the common activities do not need ADB use, it is good to have this setup.
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Gurus, fellow members - comments are now welcome. Please suggest if anything is missing or needs to be corrected/improved etc.
Disclaimer - this guide uses videos and information compiled from various forums. All credits to original posters.