Nanotechnology is a diverse field including any activities at the level of atoms and molecules (or more specifically between 1 and 100nanometers) that could have applications in the real world. In recognition of this diversity many people prefer to talk of nanotechnologies than of nanotechnology.
A common feature that many nanotechnologies exploit is the special properties that materials display at this scale. For example by dividing a certain volume of material into nanoscale particles you radically increase the surface area. This makes the material more reactive. That is why icing sugar dissolves more quickly than granulated sugar. Also the size of nano-scale particles means they may be able to enter body cells or pass straight through skin.
Just like any new technology (e.g. steam, electricity) all these special properties may be very useful or harmful depending on the situation.