Algorithm
An algorithm is a set of step-by-step instructions for solving a problem or making a decision. Recipes are algorithms; so are the rules that rank search results or choose which posts appear in your feed.
In one line, for a 12-year-old
An algorithm is a recipe a computer follows, step by step.
An example
A video app's recommendation algorithm looks at what you watched and for how long, then picks the next video it thinks will keep you watching.
Why it matters to people
Algorithms decide a lot quietly: prices, feeds, credit limits. You have a right to ask what a decision about you was based on, and in Canada some public-sector uses must be assessed and explained.