What is verification ?
Functional verification is the process of verifying that the logic design conforms to specification. For example, if the design is a simple 4-bit counter, functionally speaking, the counter should count from 0000 to 1111 and roll back to 0000. Verification is the task of verifying that the counter "does what it is supposed to do" - count from 0000 to 1111. If the design has some fault, and the count stops at 1100, then there's a bug in the design, which needs to be corrected. As you can see, this will make or break the design. In modern computer chips, it is very important to perform functional verification before the chip is sent for production. You wouldn't want to buy a product which contains a chip that doesn't work right ?