Schools take your best score per section. So if I took the ACT three times and my English section score went: 22, 23, and 25, they'll count the 25 towards admission. They call this "super scoring," and it's very much to your advantage to take the exam multiple times.
Be careful, not all colleges will do that. The top ones don't; they want to see all the scores. Most colleges do not care about anything but composite score for the ACT as it is.
----Actually, I think many schools do look selectively at the top ACT/SAT scores of their applicants. Then, when summarizing the average ACT/SAT score data to characterize the last incoming group of Freshmen, they definitely report the average of the top scores. Those data figure very strongly into their collegiate rankings which are used, in turn, to keep attracting academically-strong applicants, bring in Federal and/or State funding, alumni funding....etc, etc.
In fact, there has been at least one well-publicized story of a D-1 school that systematically reported falsely high average SAT scores for its incoming classes over the past several years to do just that--improve their national ranking.
The composite score for the ACT is the overall score, based on the English, Math, Reading, and Science sections. Colleges do not tend to look at each individual section; they consider the test as a whole.