Backwards compatibility means that new things can still work with old things even if they were not made together. Think about it like a toy car and a ramp. If your toy car is backwards compatible with your old ramp, you can still use your new car with your old ramp and it will work just fine.
For example, if you have an old video game and a new gaming system, if the gaming system is backwards compatible with the old game, you can still play that old game on the new system.
This is important because it means that people can still use their old things even if they get new things. It's like saying "Hey, we made something new, but don't worry, you can still use your old things with it."