A chiller is a machine that removes heat from a liquid via a vapor-compression or absorption refrigeration cycle

Absorption refrigerator

An absorption refrigerator is a refrigerator that uses a heat source to provide the energy needed to drive the cooling system...

. This liquid can then be circulated through a heat exchanger

Heat exchanger

A heat exchanger is a piece of equipment built for efficient heat transfer from one medium to another. The media may be separated by a solid wall, so that they never mix, or they may be in direct contact...

 to cool air or equipment as required.
In air conditioning

Air conditioning

An air conditioner is a home appliance, system, or mechanism designed to dehumidify and extract heat from an area. The cooling is done using a simple refrigeration cycle...

 systems, chilled water is typically distributed to heat exchangers, or coils, in air handling unit

Air handler

An air handler, or air handling unit , is a device used to condition and circulate air as part of a heating, ventilating, and air-conditioning system. An air handler is usually a large metal box containing a blower, heating or cooling elements, filter racks or chambers, sound attenuators, and...

s, or other type of terminal devices which cool the air in its respective space(s), and then the chilled water is re-circulated back to the chiller to be cooled again.