Equalization describes the process of boosting or attenuating (reducing) the levels of different frequencies in an audio signal, using an equalizer. In basic terms, equalization is about making certain instruments or voices louder or quieter than others.
You tend not to find equalizers on synths as the on-board filters take the task of controlling the tones. You are more likely to find equalization options on electric pianos and guitar amps with the treble, middle and bass settings a common sight.
A simple way to understand equalization is to think of the bass and treble controls on audio equipment that you have at home. The bass controls the lower frequencies and the treble controls the higher frequencies, letting you fine-tune the output to a balance that you prefer.
A common use of equalization is to remove any unwanted sounds, for example, this could be a scrape on a guitar string or a hum from a guitar amp. Equalizers can also be used to modify the timbre (tone) of instruments by adjusting the frequencies to better fit the overall mix.
Different instruments fit into different areas of frequencies, these range from the lows (kick drums and bass guitars) through to the mids (snares and synth pads) up to the highs (vocals and hi-hats).
The key is to highlight each of the instruments certain frequencies for a well-balanced mix. For example, taking some of the high ends out of the bassline and cutting some of the low ends from the vocals will result in a more balanced sound.
It can be easy to take things too far when you EQ and this will start to create an unnatural sound. Knowing where to EQ and by how much will take time and practice, but it will certainly help to improve your overall sound once you start to get the hang of it.