Fileless is a new way of transmitting and receiving content between your application and your localization service. This new way is based on the transmission of individual batches of phrases that need localization, which are either added or update a pool of phrases that is available for your application in the Content Delivery Service. Additionally, by treating these phrases as individual chunks of content, you can merge content from different applications and treat it as a single pool of phrases. Using again this fileless transmission of phrases your applications request for batches of translated content to display a localized version.
Up until now this communication was made using localization files. Due to the fast pace that development is current in the file-based approach introduced some problems in managing and syncing updates when more than one developers are working on the same part of the code, see here for a detailed explanation of the introduced problems.