The law of conservation of mass states that matter can neither be created nor destroyed, and it just transforms from one medium to another. Therefore, when a chemical reaction occurs, we need to balance the equation to ensure that the number of particles of the reactants are equal to the number of particles of the products.
Consider the following (unbalanced) equation:
H2 + O2 -> H2O
If this is what actually happens, then where is the second atom of Oxygen?
To ensure that stuff like this doesn't happen, we have to balance equations:
2H2 +O2 -> 2H2O
Now if you count the atoms, you have 4 Hydrogen atoms and 2 Oxygen atoms on both sides, and conservation of mass takes place.