Sleep was a biological process engaged in by many beings, both sentient and non-sentient, such as humans for the purpose of rest and rejuvenation. Sentient beings that slept generally did so according to a set routine and often utilized a comfortable piece of furniture, such as a bed, for the purpose. During sleep, many begins experienced dreams, nighttime visions that often played out as fantastical versions of things they had seen in real-life. A lack of sleep could have deleterious effects on one's psyche.
After Anakin Skywalker began experiencing Force visions during sleep of his mother, Shmi Skywalker Lars, dying, he began having trouble sleeping. He later experienced this same problem after witnessing a Force vision during sleep of his wife Padmé Amidala dying in childbirth. Darth Sidious killed his master, Darth Plagueis, in his sleep.
Although droids, as mechanical beings, could not sleep, it was possible for at least some to "power down," experiencing a similar state in which they were not active, but could be brought back to an active state at moment's notice.