So imagine you are playing with your toy guns and you shoot your sister's toy car with a little foam bullet. When the bullet hits the car, it might bounce off or leave a little dent, but it doesn't really do much else.
Now imagine if that same foam bullet hit a little tube that was filled with a tiny explosive. This explosive is called a squib. When the bullet hits the squib, it sets off a small explosion that makes a loud pop and creates a small puff of smoke.
This is kind of like when you pop a balloon - it makes a loud noise and there's that sudden burst of air that comes out. But instead of air, the squib explodes and creates a burst of smoke.
In movies, sometimes they use squibs to make it look like someone was shot. Actors will wear a little packet of fake blood and when the squib goes off, the fake blood will squirt out and make it look like they were really hit.