This is like the squirt of water that comes out when you press the trigger. It's an electrical charge that travels down an axon when a neuron has passed its threshold and fires.
This is like the state of your water gun before you press its trigger. It's the state of a neuron when it's at rest and capable of generating an action potential.
This principle states that if a neuron fires, it will fire at full strength or not at all - just like your water gun either squirts fully or doesn't squirt at all depending on whether you've pressed hard enough (reached the threshold).