What does "maxing out IRA" mean? I understand that it means there is a cap, but why? And is it per year?

So, I have an IRA, I don't believe it is a Roth, but at the same time I don't really understand the difference between the two.

I'm 18 and I have a part time job and I make 2k a year (part time and I can only work during the summer and breaks as I'm not home for school).

I have 2k in it right now, but I have 20k in my savings, should I put a lot of that money into my ira?

People always say "max out" but I don't make enough to max it out from my money from work, so can I put in money from my savings?