Twisted wire is used for sections that you do not want to trigger the correction on the collar. The dog can walk safely over these sections without fear of getting shocked. Twisted wire is most commonly used to connect the base station to the main loop or to connect a smaller sub-loop to the main loop. Note that you cannot use twist wire as part of your main loop.
Twisted wire is actually two individual insulated wires twisted together. You can make twisted wire yourself by braiding together two regular boundary wires if you need to only make a small distance (under ten yards). If you need larger distances of twisted wire, it you are better off saving time and buying pre-twisted wire.
Twisted wire comes in two thicknesses, 20 gauge (thinner) and 18 gauge thicker. Get the thickness that matches the rest of your boundary wire.