Soil is made up of tiny grains of minerals. The size of a soil's particles determine how soil interacts with water and what types of plants can grow in it. Knowing the dominant soil in your garden allows you to pick the best plants for it, or to add other types of soil to prepare it for what you want to grow.
Sand is the coarsest kind of soil. It contains large particles that can be seen with the naked eye and are between 0.05 and 2 mm large. Sand soils feel gritty whether wet or dry. Water can easily flow between the coarse sand grains, but the sand does not retain the water; sand gets wet easily and dries easily. Because sand particles are far apart, they allow a lot of oxygen into the soil.
Silt is the next largest type of soil. Silt particles are between 0.05 mm and 0.002 mm in size and can only be seen beneath a microscope. Silt feels slippery and smooth when wet and retains moisture much better than sand. Water takes longer to infiltrate silt, but it also remains in it longer.
Clay soils have particles smaller than 0.002 mm in diameter, which require a powerful electron microscope to see. Clay soil becomes plastic-like when wet and can dry to a solid brick. Of all the soil types, clay is the most resistant to the flow of water. Liquid takes a long time to soak into predominantly clay soil and, once in, will stay for quite a while. Clay soil also has very poor aeration and is difficult for roots to penetrate because it is quite dense.
Loam soil isn't really a "type," but rather a combination of all of the other types. Loamy soil has good drainage and air supply because of its sand content, but also has good water retention because of its silt and clay. This makes loam an ideal form of soil for gardening, since it retains a supply of water to nourish plants but also allows aeration to prevent root rot.