The owner component is supposed to manage all its owned components. The owned components gets destroyed automatically when the owner is destroyed. This helps the developer who just drags components from the tool-palette, drops them on the form and just hooks up the events to get his work done without worrying about managing the lifetime of the components.
The form is the owner of all components dropped on it. The Application object is owner of the form. When the app is closed the Application object is destroyed which in turn destroys the forms and all the components.
But the owner is not really necessary when a components is created. If you pas Nil to the parameter, the component will be created without an owner. But it will be the programmer's responsibility to manage the component's lifetime.