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Plywood is primarily used where you need either stability or strength. Plywood is called that because it is made up by gluing separate layers (each called a ply) together into a solid sheet. Each successive ply in a stack is at right angles to the one below it. As a result, plywood does not change dimension (except perhaps for a tiny amount of thickness) as it undergoes humidity changes, while regular solid wood does.

If you have a single panel door that is 16" wide, with the grain running vertically, as the humidity in the area increases, the door will grow in width, perhaps as much as a quarter of an inch. When the humidity drops, the board will shrink back to the original size. This happens very slowly, and is slowed even more by various finishes. However, it will not grow (or not nearly as much) vertically. When making furniture, it is important to take this into account so you don't have a glue joint with wood grain at right angles, or the joint will eventually fail.

Plywood, because of the cross ply construction, does not change size with humidity. In construction, it is important to have this stability.

Also, a plywood panel is typically stronger than the same sized panel of the same type of wood. Even minor imperfectons (knot holes, etc) don't dramatically affect the strength of a plywood panel, but certainly would in a solid wood panel.

Of course, you need to pay attention to the type of plywood. Interior grades don't have waterproof glue. Exterior grades have a more water resistant glue and work in most cases, but if you really want to resist water, you would want marine grades of plywood. No grade will last all that long unless it is protected (covered with siding, roofing or painted).

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