Your First Coroutine

Update() must finish every frame, so it cannot wait. A coroutine can: it is a method that pauses and carries on later, right where it stopped. It returns IEnumerator, which needs using System.Collections;, and each yield return in it is a pause. In C#, yield return makes a method that hands out its values one at a time; Unity asks for the next one when the wait is over. yield return null waits one frame, and yield return new WaitForSeconds(3f) waits 3 seconds.

StartCoroutine(Cycle()) starts one. This traffic light goes green, yellow 3 seconds later, and red after one more second:

using System.Collections;
using UnityEngine;

public class TrafficLight : MonoBehaviour
{
    Renderer lamp;

    void Start()
    {
        lamp = GetComponent<Renderer>();
        StartCoroutine(Cycle());
    }

    IEnumerator Cycle()
    {
        lamp.material.color = Color.green;
        yield return new WaitForSeconds(3f);
        lamp.material.color = Color.yellow;
        yield return new WaitForSeconds(1f);
        lamp.material.color = Color.red;
    }
}

StartCoroutine runs the coroutine up to its first yield at once, then Start() carries on; Unity resumes it after each wait, with its local variables as they were. A bare Cycle(); without StartCoroutine does nothing: it builds the paused method and drops it, and not one line of it runs. And yield return 3f; is not a 3 second wait: Unity only knows wait objects such as WaitForSeconds and treats any other value as one frame.