A Managed account in SharePoint is an account that is completely managed by Active Directory.
Service accounts are a prime example. These accounts are typically domain-level accounts that are managed in Active Directory (AD). Being an active directory account means it is subject to the policies implemented across the organization. For example, a user may have to change their password every six months. The policy may dictate that the password meet certain criteria such as containing upper case and lower case characters.
The problem with this scenario in SharePoint terms occurs when the password needs to be changed. The service stops working when the password expires. If the account is the identity for multiple services, they stop working too, which potentially brings a working SharePoint installation to a stop.
In many organizations, there is a division of responsibilities that can prohibit the SharePoint Farm Administrator from changing the password of an AD...
