Introduction to Separating Challa

Although challa refers to the two loaves of bread (or matza) over which we say the ha'motzi blessing at Shabbat and Jewish festival meals, challa also means the portion of dough or bread that we are obligated to give to the cohen/priests during Temple times.  Today, we burn a token portion (“challa”) of dough.
Note Burning the challa is not considered to violate bal tashchit (needless destruction), since the challa is separated and destroyed to fulfill a mitzva.