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Caramel candy is a soft, dense, chewy, caramel-flavored candy made by boiling some combination of milk, sugar, butter, vanilla essence, water, and glucose or corn syrup. It is not heated above the firm ball stage (120 °C (250 °F)), so there is almost no caramelization. This type of candy is often called milk caramel.
Because of the high temperatures involved in what is essentially molten sugar, care must be taken in both handling the product and in the cookware used (to avoid scorching of the careamel or releasing harmful substances from the cookware).
There is an excellent guide to the basics here: