The marketing team will send the advance reading copy (ARC) to reviewers and booksellers so that everyone has a chance to see what they think of the book before it's officially released. I can recall reading the first Harry Potter in ARC form.
Because marketing grabbed the first galleys in order to make the ARC, ARCs are sometimes called bound galleys, or galleys for short.
This gets a little bit confusing, because often if a bookseller or marketer speaks of a galley, they mean an ARC. But if an editor or designer speaks of a galley, they mean the print-outs routing around the offices.
The author and illustrator will be exposed to both kinds of galley, and will need to keep them straight.
Another thing to remember about ARCs is that they're expensive. Now, if you've ever seen one, you'll have a hard time believing this. They're paperback. They're on cheap paper. There are no special effects like shiny foil or embossing or whathaveyou. The binding is the crappiest kind of glue, which will fall apart after two or three readings.
But the reason they're expensive is that the publisher prints so few of them. A normal hardcover book gets a print run in the thousands (perhaps tens of thousands) of units, and has a PPB of between $1 and $2. An ARC (however crappily-made) has a print run in the hundreds, and has a PPB of three or four times that.
So galleys are not like buckshot loaded into a shotgun, meant to be fired in the general direction of marketing opportunities. They are sent to the people who will very likely make a difference in the sales numbers. Try to remember this before you suggest that your publisher send you a couple hundred to pass out to your friends.