SEO stands for Search engine Optimization.
It is the art of identifying actual keywords, and removing penalties that the search engines impose based on rules they set. There is no publication from the search engines to tell us what these penalties are. But through many years and hundreds of SEO professionals monitoring various factors, and the search engines releasing some information we have learned many ways to remove the most obvious penalties.
Identifying keywords, is likely the most important step in SEO. If you are not targeting actual keywords that people search for, then every single thing you do is a waiste of time and money.
Lets try to understand what happens when we search for something
If you were to search for "Televisions", the search engine takes that information and goes to its database of known websites relating to tv. Then inside that database they stack them top to bottom best to worst, similar to a school ranking system using A-F, the best A students get on top of first page, and the rest fall in behind.
What is a spider? A spider is a peice of software, that travels the web of the internet, and records everything on every website it is able to visit. With proper web design all pages are indexed.
Now here is what happens when a "spider" crawls your pages.
Search engines need a way to rank all these websites, so what they do is send a spider to your page and that spider records all the information and each page that it can find a link to and puts in the index, it then gives it a date and timestamp.
It now has the data it needs to grade the website, so it calls in the "algorithm", and its job is to take the information that was saved and apply a set of rules and deducting points for bad results, it is also determining what keywords you will be ranked for if any.