In plain English
A context window is the model's working space for the current interaction. It can include your prompt, earlier messages, documents, tool results, and other input. When too much information must fit into that space, some material may need to be shortened, summarized, or left out.
Example
If you give an AI assistant a long contract and then ask questions about it, the contract, your questions, and the conversation all consume space in the model's context window.