String ferrules are small pieces of hardware, almost always metal, that are installed on the instrument to help seat the strings, and to keep them from gouging into the wood. They usually are seated into a properly sized hole by friction, and often have knurled/grooved shafts to help them grip the wood.
String ferrules are often seen on the back sides of electric guitars, where the strings go up through the instrument body.
On cigar box guitars, string ferrules are very useful for neck-through and neck-on-top builds, to give the strings a firm place to seat, and to keep them from cutting into the wood. They can also work if you are bringing the strings up through the cigar box. See the photo for an example.