A moderator is just a regular redditor like you except they volunteer to perform a few humble duties within a particular community:
- They set up the community, deciding things like its subject, description, and whether it should be considered "over 18."
- They add the custom logo and styling, if any.
- They can mark their own posts or comments as an official moderator submission, which on the site adds an "[M]" and turns their name green.
- They can remove posts and comments from their community if they find them objectionable or off topic.
- They can ban a spammer or other abusive user from posting or commenting in their community. (This has no effect on the user elsewhere on Reddit).
- They can add other users as moderators.
Moderators have no special powers outside of the community they moderate and are not employees nor are they appointed by Reddit.