Okay kiddo, so a long time ago, there was a place called Hungary. It was ruled by someone called a prince. A prince is a really important person who looks after a place and makes sure everything runs smoothly.
Now, Hungary was not always one big country like it is now. Back then, it was divided into little areas called principalities. Each principality was ruled by its own prince who made decisions for the people who lived there.
So the Principality of Hungary was one of these little areas in Hungary. It had its own prince who made sure things were going well for the people who lived there. It was like a little team within a big team.
Over time, Hungary grew bigger and stronger, and the principalities became less important. The country became one big country with one big leader, called a king. So the Principality of Hungary isn't a thing anymore, but it's an important part of Hungary's history.