Okay kiddo, imagine you have this big book, and inside this book are different stories about different worlds, but they are not like the world we live in right now. They are like if you had a magic wand and could make anything you wanted happen in your imagination.
So, some people really like these stories so much that they want to make their own version of the story, like changing some parts, adding new characters or places, or even making up completely different endings. This is called fan fiction – it's like making your own story inspired by parts of the original story.
Now, imagine that in this book there is a story about a boy named Harry Potter, who goes to a special school for witches and wizards, and he fights against an evil wizard named Lord Voldemort. Well, some people might think, "What if Harry was a girl instead?" or "What if Harry's dad didn't die?" or "What if Harry was a mermaid instead of a wizard?" These different versions of the story are like they are happening in a different universe, a different world where things happened differently.
So, that's what alternate universe fan fiction is: it's when people imagine different versions of stories, in different worlds or universes, where things happened differently than in the original story. It's like if you had a big box of Legos, and you can build different things using the same bricks – the story is the bricks, and the fan fiction is building something new with them.