The block size describes the amount of data which a block is allowed to take up, measured in bytes. Miners are not allowed to create a block with more data than the block size limit allows for, limiting the number of transactions miners can fit in each block.
This limit is in place to ensure the blockchain does not grow too rapidly in size, which would prevent average individuals from being able to maintain and query the blockchain. The block size limit is also the reason miners collect transaction fees based on the data size of the transaction. Miners are attempting to maximize the total fees they can collect per block.
Before SegWit activation, Bitcoin blocks were strictly limited to being at most 1MB. After SegWit, blocks are measured by weight rather than size. The maximum possible size of a block post-SegWit is now 4 MB.