To put it simply, Google Trends records what keywords people are using when searching the internet. You can enter one search phrase, or many to compare, google then returns the results in a chart form. Popularity is broken down by region, city and language. It is possible to refine the main graph by region and time period.
An additional feature of Google Trends is in its ability to show news related to the search term overlayed on the chart showing how new events affect search popularity.