Think about the number 70,000,000,000,000,000,000,000,000. Imagine trying to read this number to someone else so they can write it down. You have effectively compressed the information into fewer words, and the other person can uncompress it by actually writing out the 25 zeros.
Many files are full of repetitions such as multiple spaces.
This means they can be compressed. It is easy to see how you can compress a file like this by indicating the repeated character and the number of times it should be repeated. Some files that you download may be compressed. For the Windows environment these compressed files have a .zip ending. For the Macintosh, these compressed files have an .hqx ending.