@simonedb, no, at this point the employer is not asking for reference letters, and they would not request them directly from you in any case. (If you have a letter of introduction from someone the employer knows very well, such as a long-time customer or valued supplier—or friend or relation— then that’s a different story.)
All they want as “reference” are the names and contact information for “solid citizens” who can vouch for your character and bona fides. So they don’t care about what your friends think of you, or even your mom and dad. They want someone who’s (preferably) not related and therefore “disinterested”, but someone that they can trust. Typically this would be a former employer, teacher, minister, coach or some other adult who has associated with you and does know you.
That, and some assurance that when and if they contact Mr. Solid Citizen he will have some idea of why he’s being called, and will know enough about you to say something worthwhile to the employer! “Uh, yeah, I think he was here for two years,” is not a reference!
(I even saw an interesting take on this in a book recently, where the applicant provided a reference from an associate who didn’t like her. The reference person was honest and spoke the truth about the applicant, but she was a type of person that the ‘employer’ was bound not to like, so hearing negative—but honest—opinions about the applicant, the employer was able to make her own positive take on the applicant. I’ll have to remember that one.)
@ChazMaz I agree that it’s kind of odd that people don’t already have a good idea of this, but it’s not really “taught”, is it? I only picked it up from general reading as a teenager.