Damage is how attacks effect an enemy. It will drain away their Health, until it reaches 0. Obviously, the goal of Dragon Ball FighterZ is to deal more damage than your opponent, and knock out all of their characters. Damage dealt by attacks varies depending on the move. All attacks cause damage scaling and hitstun decay, both of which make it impossible to continue a combo forever.
To put it simply, a move does less damage the farther along in a combo it is. A move that does, say, 500 damage when used normally may only deal 200 damage if it is the 20th hit in a combo. Furthermore, all attacks stun the enemy for a short amount of time, preventing them from taking any action. It is for this reason that combos can exist, as another attack can connect before the stun time ends. However, the longer the combo, the shorter the amount of time any move will stun the opponent. Therefore, it is impossible to continue a combo forever.