The term "entity" in the Tremulous context usually refers to the entities used by mappers (see also mapping).
If we say "thingy" instead of "entity", it's more clear what an entity is. If mappers want to put a sound source (like e.g. wind) on their map, they create a speaker entity. If they want a door, they create a door entity. An entity is just a thing!
For the sake of consistency and practicality, even all the walls, floors, ramps etc. of a map are all of them one combined entity: The worldspawn. So, a map basically only exists of entities. Those, in turn, contain definitions and brushes, which makes them functional.