Wayland is a computer protocol that specifies the communication between a display server and its clients, as well as a reference implementation of the protocol in the C programming language.
Wayland's main goal is replacing the X Window System with a modern, simpler windowing system in Linux and other Unix-like operating systems. The project's source code is published under the terms of the MIT License, a permissive free software licence.
As part of its efforts, the Wayland project also develops a reference implementation of a Wayland compositor called Weston.
To test Wayland, you will need to have a compatible "composition manager" installed. A composition manager in Wayland is what used to be a compositor in X, merged with the "display server". Weston is the reference implementation of the concept, but each desktop environment implements their own composition manager.
A good way to test Wayland is to install the GNOME desktop environment and select the "GNOME on wayland" session when logging in.
Xresources won't load
This is a known issue. Back in 2015, it was decided that the resources were too slow to load and that was dropped from the main GNOME session, see Redhat's bugzilla for more information.
Workaround: run this by hand or setup something to start it up automatically on session login.
xrdb -load .Xsession
Why is Wayland necessary?
Wayland allows better isolation between processes: one window cannot access resources from, or inject keystrokes into, another window.
Wayland also has the potential to be faster, by reducing the amount of code between the processes and the hardware, by delegating lots of things to the processes themselves.