What are intrinsic camera parameters?
The intrinsic parameters represent the optical center and focal length of the camera. The world points are transformed to camera coordinates using the extrinsic parameters. The camera coordinates are mapped into the image plane using the intrinsics parameters.
What is the problem of pinhole model?
The model does not include, for example, geometric distortions or blurring of unfocused objects caused by lenses and finite sized apertures. It also does not take into account that most practical cameras have only discrete image coordinates.