SharePoint Audience Targeting - In simple words

Sharepoint list items or documents can be made to appear(also known as targeting) only to specific people or group. The specific people or group are known as Audiences.

Audience targeting does not change the permission of the list item or documents. It only affects whether it is visible to a group of users or not.

Audience targeting can be used in the following three cases.
1.list items or document in SharePoint List or Document library
2.Web Parts
3.Navigation Links.

You start by selecting 'Enable Audience Targeting' in the Audience Targeting Settings of a list.After that when you create new item or edit an existing item a people picker field (titled 'Target Audiences') will appear and any user with Author access can specify Target Audience.

The target audience can be specified in a web part under 'Advanced' configuration options. A people picker field is available to select the users.