SEO is a short term for search engine optimization and it is used to make your website rank higher in the organix search engine results. Search engines like Google, Yahoo and Bing all have complex algorihtms to evaluate and rank websites according to search terms that people use when they are searching the web.
Search enige optimization techniques are used to make sure that your website is prepared so that it will have the best possible way to be visible in the search engine results. This includes managing the code and text at your website so that search engines can crawl your website easily and will rank it accordingly to the search term you want to be seen in the searches.
Website optimization is only the technical aspect of websites visibility in the search engines. The more important subject is the keywords or search terms you want to be seen on the web. Keyword analysis is the core basics of SEO and must be performed everytime before any SEO work can be applied to a webpage or the whole site.