Paneer is a simple farmer cheese that you can easily make at home, although it is more convenient to buy at an Indian store where it is very easy to find.
Paneer was likely not invented in India, and when and how it got there is in dispute. Some trace it back as far as 300 CE, yet it was considered taboo by Indo-Aryan culture to split milk using acid. Another likely source was the Moghals, or perhaps by way of Afghanistan.
Paneer is used in many dishes, like shaaks, to add weight and protein. Or it is sometimes the feature of the dish. Many popular restaurant foods feature paneer, like palak paneer and paneer makhani.