A geyser is a geological feature caused by magma heating underground water. The water, which becomes steam, erupts to the surface due to the pressure.
In Impossible Creatures, a geyser is the only place where an Electrical Generator can be built. The idea is that the pressurized steam provides energy to power the generator.
Geysers can be found on land or underwater. When a Generator is built on an underwater geyser, it simply floats on the surface.