VPN is an acronym for Virtual Private Network. A VPN creates a secure network connection over a public network such as the internet.
Simply put, instead of accessing the internet directly through your ISP, you access the internet through an encrypted/secure VPN tunnel. Without a VPN, when you access any information online it goes through your ISPs servers. This allows your ISP to see anything and everything that you do online. With a VPN, you connect to a server run by the VPN provider. This is done through an encrypted connection. By doing so the only information your ISP can see is fully encrypted. This makes it impossible for them to monitor any of your activity.