Why do some journals ask if there is someone who you do not wish to use as a referee? I have noticed that sometimes when you submit an article to a journal it will ask if there is someone in particular who you do not want to referee the paper.

I was wondering what the reason for this option was.  Is it simply to avoid a conflict of interest or if you really do not get on with the person to the point where you do not wish them to review something you have written?  If you put someone down as someone you do not want to be a referee, will the journal think you are scared of that person's critical appraisal of the document and actually send it to that person or will they genuinely avoid sending it to that person for review?
This happens when the author (or applicant in the case of a grant) believes that some likely referee might not act fairly for some personal reasons.  In my experience this is usually some history in these disputes. There might also be conflicts of interests.

Often there is guidance on who can be excluded, and the person must provide some measure (sometimes merger) of justification.