Auto-focus is a feature of digital cameras that allows them to focus correctly on a subject. It enhances the quality of the photo over fixed-focus cameras and allows for close-ups (or the even closer macro shots).
Phones use passive auto-focus with contrast measurement. This means that the camera needs contrast to focus and have problems focusing on a blank wall or in low light conditions.
Some phones can use their camera LEDs as a focus assist light to help deal with the latter case.