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WordPress is a system that allows you to manage your content. You might call it a content management system, or CMS, but only if you cared about this stuff. It’s a system built on a bunch of files that talk to a database. Sorry if that’s too technical for you. There are a bunch of people working on it, making it better. Because you, or someone who cares, can see what those files have in them, it’s called “open source”, where the “source” of the system, the files, is “open”.
Wordpress is a system that allows you to manage your content.
It’s possible to go to http://www.wordpress.org and download the whole bucket of files and install them on your own web server. If you were a programmer or a developer, you could change them and do whatever you wanted to with them.
So, if you spent all of your time to build this really cool new CMS thing, but you just give it away to everyone for free, how would you ever make any money from it? If you’re smart, you create a hosting company that lets people use it for themselves and then charges those people for add on special features. This means that you can get a free web site using WordPress for your very own small business. You’ve heard the phrase “The first one’s free”? It’s like that.