A chunk of any type is a waste object generated either by butchering animals or by fierce combat with an opponent with an attack capable of latching on. Chunks have no in-game use and are considered refuse. In stockpiles and the z-stocks menu, they are classified as remains, along with dead vermin. They can however be used in Adventure Mode as thrown projectiles, which is both awesome and hilarious.
When a creature is biting another and has a body part grasped in its mouth, chunks of the body part can get ripped away, worsening the wound. Sometimes the entire body part will remain in its mouth as it is torn away, but this is not a "chunk", which is generic. On major body parts, if too many chunks get ripped away, the wound could become instantly fatal.
Chunks will rot fairly quickly and produce miasma, and chunks can quickly add to clutter in butcher shops, so ensure that you have enough refuse stockpiles and/or garbage dumps, and enough dwarves with the refuse hauling labor activated to account for this.