on IRC there are two things passwords can be used for.
On some irc networks they have something called services.
You can register the nickname you want to use on irc so that it belongs to you and no one else can use it.
Also there are things called "key" or passwords that are used to join a certain channel.
in mirc you would use the command
/join #channelname password
where #channelname is the channel you want to join and password is the key word or password to use to join that channel.
