The driver is a software update for the PC system that allows the touchscreen and computer to work together. It tells the computer's operating system how to interpret the touch event information that is sent from the controller.
Most touch screen drivers today are a mouse-emulation type driver. This makes touching the screen the same as clicking your mouse at the same location on the screen. This allows the touchscreen to work with existing software and allows new applications to be developed without the need for touchscreen specific programming.
Some equipment such as thin client terminals, DVD players, and specialized computer systems either do not use software drivers or they have their own built-in touch screen driver.