its bit likes "TUNES" they help you breath more easily - basically any normal filter in a box is quite restrictive when it comes to the amount of air it can supply (or should I say it can allow through it) Adding higher volumes of air to the combustion mix allows a more efficient fuel burn, which in turn improves power and fuel economy.
An induction kit is usually a filter (cone normally as it allows more surface area than a flat panel) and some larger bore inlet pipes to the air flow sensor which give it a more smoothed out, straight forward route, sometimes come with a heat sheild to stop the filter pulling in hot engine bay air as cold air is denser than hot air (so in a given volume there is more air - if you see what I mean ) so this will also increase the amount of air and also allow the engine to supply slightly more fuel to that air - hence more power