Search Engine Optimization primarily refers to the practice of tweaking a website so that it performs well (shows up high in the results) in search engines. In the past, the practice was only applied to standard websites, but now it is starting to be applied to social profiles as well (Facebook pages, etc.).
By “tweaking”, I mean making small changes. Making changes that comply with Google’s regulations is fine, and will enhance a site’s ranking if best practices are followed. Making changes that do not comply, with the intent of “tricking” the system into ranking your site, is referred to as “black hat” SEO and is not only frowned upon, but can get your site banned from Google.
SEO consists of two aspects: on-page optimization and off-page optimization. On-page tweaks include using certain desired key phrases in certain frequencies in certain places on the site. Technical tweaks can be performed behind the scenes as well. Off-page optimization basically refers to link-building (encouraging other relevant and highly-valued sites to link to yours).
It is believed that link metrics account for nearly 75% of all factors taken into account when a search engine decides to rank a page. The truth is that no one really knows exactly what the algorithms are, but there are certain provable best practices that can be applied to boost the traffic that comes to a website from search engines.