Here is an excellent 13′ video on creating project charters. Very clear explanation of the role and benefits of the charter, as well as a clear analysis of components and useful guidance on drafting one.

The charter is to be a model of the project organization that key stakeholders can buy into. In one or two pages, it should a) authorize the project manager to begin work, b) outline project business case and expectations, and c) summarize what the project is, as a complete system of human activities.  This milestone ends project definition, begins planning, and, in agile projects, development work as well. These days, a charter often declares also what approach(es) to developing deliverables the project will take; agile, waterfall, or some hybrid.