Two-factor authentication adds an additional layer of security by introducing a second step to your login. It takes something you know (i.e.: your password), and adds a second factor, typically something you physically have (such as your phone). Since both are required to log in, in the event an attacker obtains your password two-factor authentication would stop them for accessing your account.
Two-factor authentication (2 factor authentication or 2FA) is the authentication process where two of the three possible factors of authentication are combined.
In internet security, the most used factors of authentication are: something the user has (e.g. a bank card) and something the user knows (e.g. a PIN code). This is two-factor authentication. Two-factor authentication is also sometimes referred to as “strong authentication”, “2-Step verification” or “2FA”.