Projects are essentially ways of pooling observations together that meet set observation criteria. While projects can be useful and beneficial, it is not necessary to create or contribute to a project to enjoy using iNaturalist. Making observations and identifying observations are by far the most important part of iNaturalist.
Projects require someone to create them and commit to administering them. A project can be ongoing, or time-bound (e.g. weekend bioblitz or bush-walk events).