AndEngine uses the Android port of the Box2D physics engine. Box2D is very popular in games, including the most popular ones such as Angry Birds, and many game engines and frameworks use Box2D to simulate physics. It is free, open source, and written in C++, and it is available on multiple platforms. AndEngine offers a Java wrapper API for the C++ Box2D backend, and therefore, no prior C++ knowledge is required to use it.
Box2D can simulate 2D rigid bodies. A rigid body is a simplification of a solid body with no deformations. Such objects do not exist in reality, but if we limit the bodies to those moving much slower than the speed of light, we can say that solid bodies are also rigid.
Box2D uses real-world units and works with physics terms. A position in a scene in AndEngine is defined in pixel coordinates, whereas in Box2D, it is defined in meters. AndEngine uses a pixel to meter conversion ratio. The default value is 32 pixels per meter.