Leaves are flammable and can be found naturally on trees. In normal worlds, they can be found in green, red, yellow, or orange colors, but they can also be painted to any of the preset colors.
In previous updates, there used to be 4 different kinds of leaves in block menu (green, red, yellow, or orange). Red, yellow, and orange leaves have since been removed from the game and replaced by the painting function.
Some use this block as grass, probably because the actual Grass block is not flammable, and because the Leaves block does not have a dirt texture on it.