First, I took very few points and did IDW and i got a circular boundary raster. This is because of the search radius i applied. If that is the case, for large number of points, the raster must look like a buffer, with the buffer width of search radius. Instead, the edges are rectangular. Why is it so? I didn't find an answer in any previous post. 
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I'm using QGIS 3.2.2. – sudheesh Apr 10 at 9:13
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A raster, by definition, is a rectangular grid of pixels, and pixels are in the shape of squares. These pixels are organised into rows and columns whereas all rows have an equal amount of pixels. So no matter what shape you buffer into a raster, you will end up with a rectangular shape. What will change is the value of the pixel, where in the image you shared, you see pixels with varying tones of white to black. The variation in colour here is a representation of the value of each pixel according to a colour scale you choose.
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I feel the same. The pixel size has changed drastically when i used more number of points. Thanks – sudheesh Apr 10 at 9:42
