what is configuration in software? and how to make it?

Let me explain you a little more.

You can have settings for your application stored in any file format of your choice like XML, TXT, BIN, DAT, ABC, XYZ, etc.  If you want to display the configuration then just bind your controls to data from your settings file.

Suppose I've settings for an application stored in a text file (for demonstration purposes):
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PrefferedPageItemCount=10  // only a single configuration
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from this configuration, every time I check the preference of Itms count on a page and render the items accordingly.

Now if I want somebody to be able to change it, I'll place few controls and bind this PrefferedPageItemCount to any control allowing the user to edit the count.
(suppose I change it to 20)

As soon the page will load next, will check the preference and render the items accordingly.

To-Rephrase my words, configuration files may contain settings for your application. The application itself could be of any domain- Desktop/Web/Mobile etc.

Hope you got the point now.