The context window is the amount of text a language model can consider at once — your prompt, the conversation so far, and any documents you provide, all measured in tokens. Everything outside the window is invisible to the model for that answer.
Context limits explain real behavior: long documents get truncated, early instructions get 'forgotten' in long chats, and retrieval (RAG) exists partly to work around the window's size.
Pasting a 300-page report into a chat may exceed the window; the model only 'sees' what fits, so a summary of the middle chapters could silently be missing.