How does it work? Or, maybe why is it a thing?
Price of stuff goes up, wages go up, etc etc, but why? Why not keep everything the same? There doesn't appear to be any real benefit to inflating costs and everything that goes into that.
Today I have a note to research and try to understand, but if anyone has a thumbnail sketch in the meantime it would save me a lot of searching and reading.
It is unlikely that you are going to have much luck understanding this from a thumbnail sketch or a quick internet search. Certainly silly textbook definitions like Justacitizen gave you aren't worth much. However, if you do manage to get a more than cursory understanding you will understand why the Great Recession and the financial crisis was so devastating, had the potential to be so much worse and why it took so long to recover.
But here is a quick attempt:
Inflation is the result of supply and demand (either for products, services, labor, money, etc). Some inflation is always good. Too much inflation is bad. DEflation is horrid.
Why is some inflation good? In gives people a reason to buy which keeps the overall economy moving forward.
It is easy to understand why too much inflation is bad....but central banks can deal with it...assuming the country issues its own currency and has a central bank.
Deflation is horrid because it can easily become a downward spiral that is extremely difficult to stop. Why buy something today when it will be cheaper tomorrow? Why invest in new equipment...add more workers...buy a home when it will all be cheaper tomorrow. This is where we were headed in late 2008. Deflation destroys value....destroys incentives...destroys growth.
"Keeping everything the same" is simple not realistic. Businesses want to maximize profit...consumers want to minimize cost. Employees want maximum wages...business want to minimize cost. These goals are competitive and force the "market" to determine price of goods, labor, or money.
Obviously this is very basic. But prices have to rise...otherwise what would be the incentive to invest or take risk? If there was no ability for gain (profit), there would be no reason to ever do anything.