Why are there two build.gradle files in an Android Studio project?

<PROJECT_ROOT>\app\build.gradle is specific for app module.

<PROJECT_ROOT>\build.gradle is a “Top-level build file” where you can add configuration options common to all sub-projects/modules.

If you use another module in your project, as a local library you would have another build.gradle file:
<PROJECT_ROOT>\module\build.gradle

For example in your top level file you can specify these common properties:

buildscript {
    repositories {
        mavenCentral()
    }

    dependencies {
        classpath 'com.android.tools.build:gradle:1.3.0'
    }
}

ext {
    compileSdkVersion = 23
    buildToolsVersion = "23.0.1"
}

In your app\build.gradle

apply plugin: 'com.android.application'

repositories {
    mavenCentral()
}

android {
    compileSdkVersion rootProject.ext.compileSdkVersion
    buildToolsVersion rootProject.ext.buildToolsVersion
}