Seed Phrase
A list of ordinary words, usually twelve or twenty-four, that encodes the master secret from which a wallet's keys are generated.
The BIP-39 standard encodes random entropy as words drawn from a fixed list of 2048, with a built-in checksum so a mistyped word is detected, and BIP-32 and BIP-44 derive an unlimited tree of private keys from that secret. This is why the phrase alone restores every address in a wallet on any compatible software, and equally why anyone who reads the phrase gains the same complete control immediately. An optional extra passphrase can be added, producing a different wallet from the same words, which protects against someone finding the written backup. No legitimate exchange, support agent, wallet developer, or token distribution ever needs the phrase, and requests for it are the most common form of consumer theft.
In practice
Restoring a wallet on a new device means entering the same phrase, after which the software re-derives the identical addresses and balances from the chain.
The common misunderstanding
The words are not a password protecting an account on a server; they are the keys themselves, so anyone who sees them has control immediately and permanently.