VPN is an acronym for Virtual Private Network. The purpose of a VPN is to provide you with security and privacy as you communicate over the internet.
When designing the Internet, the priority is to be able to send packets (pieces of data) as reliably as possible. Networks across the country and around the world are relatively new, and hubs are often shrinking. Most basic Internet protocols (communication methods) are designed to pass errors, not to protect data.
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The applications you normally use, be it email, web, messaging, Facebook, etc., are based on this core Internet Protocol (IP). While several standards have been developed, not all Internet applications are secure. Many still send their information without any protection or privacy.
This leaves every internet user vulnerable to criminals who might steal your bank or credit card information, governments who might want to eavesdrop on their citizens, and other internet users who for bad reasons want to spy on you for various reasons.
VPN creates a private tunnel through the open internet. The idea is that everything you send is encapsulated and encrypted on this private communication channel, so your packets cannot be decrypted even if they are intercepted.