The Activity Stream Feature collects users actions with files and folders and notifies other users of those files and folders in the Web App and optionally by email.
Users can choose which actions they want to be notified about, and can opt to only get notified about files and folders they have marked as favourites.
Activity can be filtered: It can show activity by the user themself, by others, on files or folders marked as favourite by the user, as well as just comments or just shares. Furthermore, users can choose granularly* about which actions they want to be notified by email or in the activity bar in the Web App.
Users can also change the activity email frequency to hourly, daily, weekly or as soon as possible.
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Resources for Activity Stream