What does it mean to soften water?

The term water softening refers to a technique which involves removing ions, the source of water hardness. 

In most cases these are ions of calcium and magnesium. During water softening processes ions of iron can also partially be removed from the water. 

The best way to use a water softener device is to install it directly to a water supply pipe entering the premises - called Point-Of-Entry (POE) installation.