Banality is a combination of many things, but mainly it consists of doubt, rationality, cynicism, disillusionment, realism and a general unwillingness to embrace the fantastic. Since the earliest days of humanity, mortals have learned to deny their dreams and fears, understanding that on some level their belief in them gave them strength. As society evolved and human existence became ever more stable and safe, the mortal realm and the Dreaming began to drift apart, eventually resulting in the Sundering and the Shattering. All of this was caused by Banality.
Despite this, Banality is an essential part of every Changeling's existence; without the protection offered by the Banality of their mortal seemings, Changelings would not be able to survive in the highly banal mortal world and would quickly perish. But even with this protection, powerful sources of Banality can harm or even destroy a Changeling's soul, and so it is greatly feared.
As well as being anathema to Changelings, Banality destroys a mortal's ability to Dream, and to create. Banality is thus seen as a major force in all that is dark and miserable in the World of Darkness, and it has many ties to the static reality sought after by Technocracy mages.
A few beings, most notably the Autumn People, are able to use Banality for minor "magical" effect in much the same way as Changelings use Glamour.