Imagine your house is like a big castle and you are the king or queen of your castle. Your castle has a big wall around it (like a fence around your backyard) to protect it from outside dangers.
Now, imagine that there are different things happening inside and outside of your castle, like playing with toys, taking a nap, or having a picnic in the backyard. But, you don't want those things to mix up with the things happening outside of your castle, like the mailman delivering letters, or your neighbor mowing their lawn.
So, you have a special place called the "demarcation point" where you can draw a line and say "this is where my castle ends and the outside world begins". It's kind of like a line on a map that shows where one country ends and another begins.
The demarcation point is important because it helps keep things organized and under control. It helps everyone know which things are your responsibility and which are someone else's.