A logical set by step process, guided by the boundaries (or constraints) defined by a problem, followed to find a solution is called an algorithm. In a better and more pictorial form, it can be represented as follows:
What does that even mean? Look at the following example to understand the process.
Let's understand what an algorithm means with the help of an example.
It's your friend's birthday and you have been invited for the party (Isn't this exciting already?). You decide to gift her something. Since it's a gift, let's wrap it. What would you do to wrap the gift? How would you do it?
Look at the size of the gift
Fetch the gift wrapping paper
Fetch the scissors
Fetch the tape
Then you would proceed to place the gift inside the wrapping paper.
You will start start folding the corners in a way that it efficiently covers the Gift.
In the meanwhile, to make sure that your wrapping is tight, you would use a scotch tape.
You keep working on the wrapper till the whole gift is covered...