Definition of "in position
When you're "in position" in poker, it's because we're talking last after the flop. preflop, being in position means being on the button or the cutoff. The worst position is the small blind which will never be in position on any other player at the table. You can still be in position after the flop. For example, a in position UTG player is not considered "in position" preflop. But if he finds himself at the flop head to head against the small blind, we will say he is in position because he will be the last one to speak out of all the streets.
The advantage of playing in position
The beauty of playing in position is that even if you don't understand why the position is important, you will still benefit from the position. in position means speaking last. Speaking last gives us an advantage over other players because we have more information than they do. You are UTG (out of position) and you have a pair of 9's. You open your hand at 3 big blinds. You then make 3bet by the in position UTG+1 player and 4bet by a conservative MP player. The small blind pushes all in and the talk comes back to you. Here it's obviously a fold and you will have lost 3 big blinds. If you had been in position on the button with the same hand, you wouldn't have lost those 3 chips.