The technical definition of an electrolyte is any fluid that conducts electricity. Electrolytes are predominantly responsible for maintaining the balance of fluids between the intracellular (inside the cell) and extracellular (outside the cell). This balance is critically important for things like hydration, nerve impulses, muscle function, and pH level.
Horses lose electrolytes rapidly in sweat. Competition, training, travel, and high heat plus humidity increase the requirement of electrolytes. Hay and grain are typically low in sodium and chloride increasing the need for supplementation.