Hi Anjali,
Salesforce Lightning Events are broadly classified into four:
1.System Events
2.Lightning Application Events from library
3.Application Events
4.Component Events
SYSTEM EVENTS
System events are fired automatically by lightning framework and during component initialization, rendering or attribute value change etc.
LIGHTNING APPLICATION EVENTS FROM LIBRARY
These events are provided by Salesforce Library that can be often used based on your requirement. However, some of these library events might not be supported in Salesforce app and Lightning Experience or a standalone app all at the same time. So it is recommended to instantiate the event using $A.get() to determine from where your component is running i.e Salesforce app and Lightning Experience or a standalone app.
APPLICATION EVENTS
Application Events helps in passing values between two independent events (without parent child relationship). It behaves just like a broadcast message wherein any device that has the receiver turned on can receive the broadcast message sent from a single device.
COMPONENT EVENTS
Component Events are required in order to pass values from child component to parent. Parent component (receiver) will be handling the event fired by the child components (sender).
Hope it helps!