Okay, kiddo, the government has decided that families are only allowed to have up to three children. This means that moms and dads can have one, two, or three kids, but not more than that.
They did this because they want to make sure there aren't too many people in the country and that there are enough resources for everyone to have a good life.
It's kind of like when you have a bunch of toys and you have to share them with your friends. If you have too many friends, then everyone might not get a turn to play with the toys, so it's better to have just a few friends so everyone can have fun.
The government also wants to make sure that families can take care of their children and give them the things they need, like food, clothes, and a good education. Having too many kids might make it harder for parents to do that.
So, in short, the three-child policy means that families can only have up to three kids to make sure there aren't too many people and that everyone can have a good life.