Ferrules are crimped onto stranded wires when used with terminal blocks. This keeps all the wires together to prevent breakage and keeps stray wires from shorting to other contacts. It creates a clean and professional look to your wiring. The ferrules are crimped to the wire using a special crimper. See the accessories on this page for a link.
There are over 950 pieces in this kit of various wire sizes from #26awg to #16 awg.
This blog post has a detailed explanation of how to use this tool to make clean connections.