A patch panel is a board with a number of electrical sockets, in networking you will often see ethernet patch panels with RJ-45 sockets. A punch down tool helps insert ethernet wiring into the back of the RJ-45 sockets. You can do this by hand, but it is difficult to get good connections leading to packet drops. Using a punch down tool makes this process faster and ensures solid connections between your cabling and patch panel.
A punch down tool, punchdown tool, IDC tool, or a Krone tool (named after the Krone LSA-PLUS connector), is a small hand tool used by telecommunication and network technicians. It is used for inserting wire into insulation-displacement connectors on punch down blocks, patch panels, keystone modules, and surface mount boxes (also known as biscuit jacks).