Sake (SAH-keh, not saki) is made from rice and water. Although sake is referred to in English as a type of rice wine, which alcohol is produced by fermenting the sugar naturally present in fruit, sake is made through a brewing process like beer.
We use sake for cooking, just like how you use wine for cooking. Sake is often used in marinades for meat and fish to tenderize and to remove their smell. Alcohol evaporate with the meat/fish odor. It also adds umami and natural sweet flavor (from rice – the ingredient for sake), so we usually add sake to the soup stock, sauces, nimono (simmered dishes like Nikujaga) and yakimono (grilled dishes like Teriyaki Chicken).
You can also use cooking sake (ryorishu 料理酒). Cooking sake is a type of sake made especially for cooking. Manufacturers are required by law to add salt (2-3%) to cooking wine to make it unfit for drinking (so that shops not licensed to sell alcohol can sell it). Some people may not want to use it as sake as it contains salt and other ingredients, but I think small amount of cooking sake should be okay. I usually use regular drinking sake.
For cooking purpose, sake can keep for two to three months, or even half a year if you store it in a cool, dark place.
For details about sake, you can read here.
Substitution: I hope you can find sake in your area as this is one of the important ingredients in Japanese cooking. However, If you can’t find sake or cooking sake, you can substitute with dry sherry or Chinese rice wine. If you cannot consume alcohol in your cooking, you can simply omit sake, or replace it with water when I use sake for steaming or making a sauce.