Though Ravenloft is primarily inspired by Gothic Horror, it owes just as much to the portrayal of that genre in Universal Horror and Hammer Horror films - particularly the latter. As such, when designing their setting, the writers at TSR felt that their setting also needed its own race of "morally ambiguous" magical gypsies to fit with the tradition.
Meet the Vistani, who were created to fill that niche. Foreign-looking humans who live as nomads, travelling the demiplane in caravans and making a living as entertainers, mystics and thieves, feared and hated by the sedentary people of the demiplane and looking down on the "Giorgio" right back in kind, smugly considering themselves superior to ordinary people and cursing them for their bigotry, even as they rob and manipulate those people whenever they see fit.
...Yeah, the Vistani do press a lot of 'Gypsy Stereotype' buttons. In their defense, they're not quite as bad as the Aperusa of Spelljammer, who're slathered with a lot more of the negative parts of that stereotype, but still, there are people who find them kind of embarrassing.
Vistani are distinguished from ordinary humans by not only possessing more knowledge of the dark creatures roaming the demiplane, but by natural affinities for magic and the ability to break some of the "rules" of the demiplanes. Vistani mystics can see the future via the power they call The Sight, an art normally impossible in the Demiplane of Dread. While technically both male and female Vistani are capable of The Sight, it is far more common among women- in no small part due to the fact that any male Vistana with the Sight is fated to become a Dukkar, who is destined to seek the destruction of the Vistani as a whole. Their caravans can reliably travel from domain to domain within it, even against the wills of the Darklords. Furthermore, all Vistani can use powerful magical curses, collectively known as the Evil Eye. There's also drawbacks to this, mostly in the form of needing to regularly travel, or else they will permanently lose all of their magical abilities.
Narratively, Vistani serve pretty much the same role that Elminster is supposed to serve in-universe: a convenient deus ex machina. Need to get the party somewhere? A Vistani caravan can take them there. Need to give your players a smack with a clue-by-four? A Vistani fortune-teller can do it for you. Party desperately needs some macguffin or another? A Vistani caravan will helpfully provide it - for a price. Need to explain why this latest monster or villain is being a nuisance? A Vistani curse went horribly right, as they seem to always do.
It goes without saying, but the combination of ethnic stereotyping and hamfisted plot device makes Vistani a rather contentious aspect of the setting for some fans.
In both 2nd and 3rd edition, Vistani were far too powerful to be used as a PC race, and so Half-Vistani were introduced instead; still with a dash of Vistani mysticism, but with some added "you are alienated from your peers" and "you were probably not conceived willingly" fluff.
4th edition's designers thought that this was stupid, and so they redesigned the Vistani into a collective culture of mystical, but not necessarily inhuman, plane-travelling nomads in Dragon Magazine #380. This meant you could finally play a full-fledged Vistani, something that was immediately met with skub.