Light waves have an associated transverse fluctuation direction. If you think in 3-D, then the electromagnetic field vectors point perpendicular to the direction of travel. So these are vectors restricted to two dimensions (the plane perpendicular to the direction of travel). This means you can describe the vectors in terms of two basis components (just like any 2-D vector). For example, any light beam can be described according to the size of the vertical versus horizontal components. Sometimes you hear of left versus right circular components, which is a little trickier, but really boils down to the same thing.

Normal, randomly generated light will always be an equal mix of components in whatever basis you choose to consider. This is unpolarized light. Polarized light refers to any case where, in some basis, the intensity of the light fluctuating one way is larger than in the other way (the components of the vector are not equal). There are lots of ways polarized light gets generated. One common case is in light reflected from a surface like water or the hood of a car. If memory serves, you can show that the reflected light will largely be polarized in the plane of the reflecting surface (I know it gets polarized, I'm just not 100% sure which way). This is where polarized glasses or a camera lens can come in handy. Polarized lenses block light polarized in one direction, but not the perpendicular direction. So, for instance, glasses are constructed as polarizing filters that block horizontally polarized light. This means if you happen to look at the sun reflecting off some surface, you won't get blinded, but the glasses won't cut out the other regular ambient light (well, 1/2 of it, but you can still see).