When you look at something, your eye receives light rays from that object. The cornea and lens of your eye take these light rays and refract (bend) them. This focuses an image of the object on the retina at the back of the eye.
Refractive error, or blurred vision, occurs when something is wrong with this focusing system. In addition to refractive error, other eye or health conditions may interfere with the focusing process and, thus, affect how well or efficiently you see.
Although each eye processes the light images it receives independently, both must work together in order to see properly. Muscles attached to the eyeball control eye movement, each with a specific action associated with it (inward, outward, upward, downward). Correct alignment of both eyes results in binocular vision. Binocular vision gives you depth perception, which is the ability to tell the distance between you and an object or between two objects.
For a more detailed overview of how the eye works, including information about eye diseases and conditions, see the Canadian Association of Optometrists' Eye Health Library.