Ransomware encrypts files on computers and servers — documents, databases and often network-connected backups too. Attackers then demand payment to "return" the files and frequently threaten to publish stolen data as well.
The most effective defence is layered: updates, MFA, EDR/antivirus, staff awareness and — above all — a backup that includes a copy isolated from the network or protected from changes (immutable).
Example
Ransomware encrypts the office file server, but the data is restored from an isolated backup — no ransom needs to be paid.