This is a picture of a cacao tree with cacao pods. Cacao pods contain cacao beans, that magical food from whence comes chocolate. I took this picture in Costa Rica at a small cacao plantation. 
After the cacao beans have been dried, roasted, and de-hulled, they are crushed into cacao nibs.
After that, the beans are ground into a liquid that is called coverture or chocolate liquor. This is pure chocolate. It is unsweetened and bitter. Coverture can be used for confection making, baking, or anything else you wish to use it for. You can also add things to it, like sugar or flavorings. 
This is a very short explanation of the chocolate making process and skips many different steps that are used in chocolate farming and factories. Since most chocolate is grown in countries that are not industrialized, many big companies don't have rigorous standards for chocolate production, especially in regards to the human labor (including child labor) responsible for harvesting and handling this magical bean. That is why it is important to be conscious of the types of companies you buy your chocolate from. For more information on fair trade chocolate, visit http://www.equalexchange.coop/. For more information on fair trade in general, visit http://www.fairtradefederation.org/.
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