Who were the Gentiles?:
The label Gentile comes from the Latin gens which is a translation of the Hebrew word goy and means nation or people. Its roughly equivalent to the Greek ethnos, though in Hebrew usage it occurs exclusively in reference to non-Jewish nations and people rather than for more general considerations. The concept of Gentile includes those nations and people who exist outside the laws and justice of God.
Where did the Gentiles live?:
Gentiles are characterized by being outside the Jewish covenant with God; as such, a Gentile might live anywhere, both in one of the many Gentile nations or within a Jewish state. A particular residency is not an attribute of being a Gentile. In fact, the label goyim appears to have been originally applied almost exclusively those non-Jews who remained in conquered Canaan, not to non-Jews living in foreign lands.
Why were the Gentiles important?:
The Gentiles were, for ancient Jews, the Other representatives of religious, social, cultural, and political practices which were generally forbidden to Jews. They were common sources of temptation to violate Gods laws and participate in activities they werent supposed to. They were also involved in the tension between particularism and universalism: should Judaism become a universal religion, welcoming the Gentiles, or remain a particularistic religion and close itself off from the outside world?
This conflict between universalism and particularism played an important role within early Christianity. Some Christians wanted to remain true to their Jewish roots while others wanted to open up and bring Gentiles in. The success of missionary work among the Gentiles, alongside the relative failure among Jews, ended that debate in favor of Christianity adopting a more universalistic stance.