A version represents a snapshot in time of the entire geodatabase and contains all the datasets in the geodatabase.
Versions are not separate copies of the geodatabase. Instead, versions and the transactions that take place within them are tracked in system tables. This isolates a user's work across multiple edit sessions, allowing users to edit without locking features in the production version or immediately impacting other users and without having to make copies of the data.
See A quick tour of versioning for more in-depth information on versions and versioning.