Stewards have the power to impose various penalties on a driver if he commits an offence during a race. Offences may include jumping the start, causing an avoidable accident, unfairly blocking another driver, impeding another driver when being lapped, speeding in the pit lane etc.
The two most common types are the drive-through penalty and the ten-second time penalty. In the case of the former, the driver must enter the pits, drive through the pit lane at the pit-lane speed limit and rejoin the race without stopping. Depending on the length of the pit lane this can cost a driver a significant amount of time.
More severe is the ten-second time penalty (also commonly known as a stop-go penalty) where the driver must not only enter the pits, but must also stop for ten seconds at his pit before rejoining the race. During this time the drivers team are not permitted to work on the car.
In extreme cases the stewards may choose to enforce a third type of penalty whereby they can force a driver to drop ten grid positions at the next Grand Prix. So even if the driver in question goes on to qualify in pole position, he will in fact start that race from 11th place.
In the case of the drive-through penalty and the ten-second time penalty, a driver has three laps, from the time his team is notified, to enter the pits (failure to do so may result in a black flag and the driver being excluded from the race).
The only exception is when the penalty is awarded during the final five laps of the race. In this case the driver may continue and complete the race. However, 25 seconds will be added to his total race time, which may drop him considerably in the final race standings.