AI words a normal person actually needs
Nobody explains these in plain English because everyone assumes you already know them. Here they are, in words you'll actually remember, no computer science degree required.
Prompt
What you type. The instruction. Nothing fancier than that.
Token
A small chunk of text, roughly three-quarters of a word. AI reads and charges by tokens, not by words or characters. You'll see this word on pricing pages and nowhere else that matters day to day.
Context window
How much the AI can "remember" at once during a single conversation: your files, your earlier messages, everything you've fed it. Once a conversation gets long enough, older parts start falling out of the window, which is why a very long chat can start forgetting things you said at the start.
Hallucination
When AI states something false as if it were fact. Not lying on purpose, more like confidently guessing and not flagging the guess. This is exactly why never taking the first answer matters.
Memory
Facts an AI tool keeps across separate conversations, not just within one chat. Turning this on is one of the biggest upgrades available and most people never find the setting.
Agent
An AI set up to take multiple steps on its own toward a goal, instead of just answering one question. Booking research, checking a website, then drafting a follow-up, without you doing each step by hand.
RAG (Retrieval-Augmented Generation)
A fancy name for a simple idea: instead of answering from memory alone, the AI first looks something up in your actual documents, then answers based on what it found. This is how it can accurately answer questions about your specific business instead of guessing.
Fine-tuning
Retraining an AI model on your own examples so it permanently changes how it responds. Expensive and rarely necessary. A good prompt with real examples attached almost always gets you 90 percent of the way there for free.
Model
The actual AI itself, the "brain" behind ChatGPT, Claude, or Gemini. One company can offer several models at once, usually a faster cheap one and a slower, smarter one.
Now that the words make sense
The 5 things to turn on first
Memory, custom instructions, and the rest of it, actually set up.
Read the guide