"Package by component" is about taking a service-centric view of a software system. In the same way that ports and adapters treat the web as just another delivery mechanism, it keeps the user interface separate from the coarse-grained components.
In essence, this approach bundles up the "business logic" and persistence code into a single thing, which we'll call a "component".
Components are the unites of deployment. They are the smallest entities that can be deployed as part of a system (i.e, Java
.jarfiles). - Uncle Bob
A "component" can also be defined as a:
A component is a grouping of related functionality behind a nice clean interface, which resides inside an execution environment like an application. A software system is made up of one or more containers (e.g. web applications, mobile apps, stand-alone applications, databases, file systems), each of which contains one or more components, which in turn are implemented by one or more classes (or code). Whether each component resides in a separate jar file is an orthogonal concern.
A key benefit of this approach is that if you're writing code that needs to do something with orders, there's just one place to go, the OrdersComponent. Inside the component, the separation of concerns is still maintained, so the business logic is separate from data persistence, but that's a component implementation detail that consumers don't need to know about.
Well-defined components in a monlithic application can be think of as a stepping stone to a micro-services architecture.