inetd, or the Internet Super-Server Daemon, is a network daemon that manages numerous services from one centralized program. It is commonly used when the use of a particular service is not high enough to warrant the overhead of having that specific daemon running constantly in the background. An example would be private POP3 mail server, which is only accessed several times a day by a single individual.
inetd works by listening to all ports indicated in its configuration file. When a connection comes in to one of the ports the super-server is watching, inetd spawns an instance the associated daemon (also indicated in the configuration file) to handle that specific request. In the example given above, inetd would bind to port 110 and listen for requests to a POP3 server. When a connection is made from a client, inetd would execute an instance of the local POP3 server to handle the request. When the transaction is finished, the POP3 server will cease execution. This saves resources on the server-side because only one daemon has to listen for incoming connections; others are only executed when they are needed.