What is OWD or Organization-Wide default in salesforce?

OWD is a record level access for an organization which specifies the level of access a user

has to other user data. You can change the organization-wide sharing settings for both standard 

and custom object. You can set the OWD for objects to private, public readonly, public read/write. 

The important thing to note is OWD never grants access on object beyond object level access.

Points to remember:

1) If we set the OWD for an object to private then only the record owner and user above the record
owner in role hierarchy will be able to see the records and edit from user interface provided object level access is enable on profile and grant access using hierarchy is checked.

OWD : Private

2) If we set the OWD for an object to public read only then only record owner and user above the record owner in role hierarchy will be able to see the records and edit from user interface and user below in hierarchy will be able to see records in read only mode on user interface provided object level access is enable on profile and grant access using hierarchy is checked

OWD : Public Read Only

3) If we set the OWD for an object to public read/write then irrespective of role hierarchy all user will be able to see and edit records from user interface provided object level access is enable on profile.

4) If we set the OWD for an object to private, we can still provide access to users who are below the record owner in hierarchy using Sharing Rules, Sharing Set (Community user), Manual Sharing, Apex Managed Sharing, Team Access (Account, Contact, Opportunity), Territory Hierarchy Access.

Important points to note: 

• We cannot uncheck grant access using hierarchy for standard objects.
• If we uncheck grant access using hierarchy for the custom object than the user above the record owner will not be able to see record if OWD for an object is private.