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to "root" your phone essentially means to give yourself superuser access on it. This is like being the highest level of administrator for the device. This allows you to change the interface of your phone. Once your phone is "rooted" you can install custom ROMs (they look alot like themes, just google the name and you'll see plenty of examples). You can also download "rooted only" applications for use on the device.

A "Root" in general is the most basic directory in a system. For instance the Root of your computer most likely is the "C:" drive. Their also happens to be a "Root" of your smartphone, which is what is manipulated in order to achieve a "rooted" phone and its benefits.

Clear enough?
 
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I will explain it like I would to my mother:

Gaining root access on your phone (or rooting for short) removes many of the restrictions placed on Android by Google/Phone Manufacturer/Verizon which allows you to change many settings and software not normally allowed.

Some actions you can perform with root access can make the device unusable.

Rooting your phone voids the warranty.

This is something that should be done unless you are willing to accept the risks and gain the technical knowledge to support yourself when/if things go wrong.
 
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