Genetic variation is the difference in DNA sequences between individuals within a population. Variation occurs in germ cells i.e. sperm and egg, and also in somatic (all other) cells.
Only variation that arises in germ cells can be inherited from one individual to another and so affect population dynamics, and ultimately evolution.

Genetic variation is a term used to describe the variation in the DNA sequence in each of our genomes. Genetic variation is what makes us all unique, whether in terms of hair colour, skin colour or even the shape of our faces.

Mutations generally fall into two types: point mutations and chromosomal aberrations. In point mutations, one base pair is changed. The human genome, for example, contains over 3.1 billion bases of DNA, and each base must be faithfully replicated for cell division to occur. Mistakes, although surprisingly rare, do happen. About one in every 1010 (10,000,000,000) base pair is changed.

DNA and Mutations :
DNA: The molecular basis of mutations
Since mutations are simply changes in DNA, in order to understand how mutations work, you need to understand how DNA does its job. Your DNA contains a set of instructions for "building" a human. These instructions are inscribed in the structure of the DNA molecule through a genetic code.