An each way bet is essentially 2 separate bets. You are betting on the horse to win with one bet and a separate bet on the horse to be 'placed'. A horse will place in a race if it doesn't win, but finishes 2nd, 3rd or 4th etc. The amount of places there are in a race will vary depending on how many horses are running in the race.
You can find out more about each way betting and how to profit from it here.