In short, Typo3 is an open source CMS - a Content Management System. Open source means that it can be used and adapted to fit your needs, without having to pay license fees to a company or developer. All you have to do is abide by the GPL or GNU Public License.

A CMS or Content Management System separates layout and design from the content. What this means is that once the developer and/or designers have created the general look-and-feel of a webpage the content can be created and edited by editors that need no further technical experience.