You can delete all of the entries in a terminology database without removing the database itself.
You primarily use this feature to clear out the terminology database after a faulty import. (Otherwise you would have to create a new TD into which to re-import the data.) Purging a TD retains existing TD group memberships, AIS assignments, and any other references to that TD in WorldServer. Purging a TD saves you the trouble of recreating those TD references in a new TD.