Terraform is an "infrastructure as code" tool. That means that we can define how the infrastructure on GCP (or any other cloud provider) should look like in a text file. When Terraform is run, it will parse this file, build a model how things should look and compare this to what is actually running in GCP. If there are any differences, it will ensure that the objects on GCP are the same as on the text file.
This is important to use because it makes our infrastructure idempotent and changes to it are easily trackable (and thus, revertible when there's a problem or mistake).
The idea of Terraform is, that SRE provides the framework and tooling and SWE only interact with the simpler configuration files. For example, if you want a new Postgresql database, all you need to do is to edit the configuration file for the databases, add a new entry and run Terraform.