A VPN, or Virtual Private Network, is a means of treating internet requests made locally (i.e., on your own home computer) as if they originated from a remote network. You can think of a VPN as a way to route all of your computer's internet traffic through a remote server.
As far as your Internet Service Provider (ISP) knows, you are communicating only with your VPN—they can't see the final destination of your internet traffic. As far as the server at the endpoint of your request is concerned, your request originates with the VPN. This means that a VPN can protect you from snooping by both your ISP and the site or service you're communicating with. It can also make it seem that your communications are originating from another place on the globe from your physical location, protecting your identity and allowing you to use services restricted by geography, such as Netflix or (if you're in China) Google and Facebook.