Short answers, pulled from the story.
Colossus was used to break the Lorenz cipher, the encryption system used by Germany's High Command (OKW) to communicate with army commands across occupied Europe. It performed statistical analysis of intercepted teleprinter messages by comparing ciphertext against an internally generated keystream, allowing cryptanalysts at Bletchley Park to determine the wheel settings of the Lorenz machine.
Colossus was designed by Tommy Flowers, a senior electrical engineer and Head of the Switching Group at the Post Office Research Station at Dollis Hill. The project arose from plans developed by mathematician Max Newman at the Government Code and Cypher School at Bletchley Park, and Flowers was recommended to Newman by Alan Turing.
The Mark 1 prototype performed satisfactorily at Dollis Hill on the 8th of December 1943 and was delivered to Bletchley Park on the 18th of January 1944. It successfully attacked its first message on the 5th of February 1944. The improved Mark 2 Colossus became operational at 08:00 on the 1st of June 1944, just days before the Normandy landings.
Colossus and the entire Bletchley Park codebreaking operation were classified for thirty years after the war. All but two of the machines were dismantled into parts too small to reveal their purpose, and Tommy Flowers was ordered to burn all blueprints and documentation. The secrecy began to lift after Group Captain Winterbotham published The Ultra Secret in 1974, and Professor Brian Randell presented a paper on the Colossi at a computing history conference in 1976.
Colossus is regarded as the world's first programmable, electronic, digital computer. The first electromechanical computer was Konrad Zuse's Z3, completed in Berlin in 1941. Because of wartime secrecy, Colossus was excluded from the history of computing hardware for many years, and it was EDVAC that became the seminal computer architecture widely known at the time.
A fully functional reconstruction of a Mark 2 Colossus, completed by Tony Sale and a team of volunteers between 1993 and 2008, is on display at The National Museum of Computing in H Block at Bletchley Park in Milton Keynes, Buckinghamshire. It occupies the historically correct location for Colossus No. 9.