Dwarf planets are worlds that are big enough for gravity to pull them into a round shape, but they haven’t “cleared” their orbital neighborhood of other objects. In other words, they share their zone with lots of other debris.
Pluto is the famous example, but it’s not the only one. Ceres lives in the asteroid belt, and several others orbit far beyond Neptune.
This category exists because nature doesn’t always fit clean labels. There’s a whole spectrum of objects out there, from tiny rocks to full-sized planets.