At various places in this book we are interested in how many operations an algorithm takes. It depends on the context what these operations are, but often we count additions (or subtractions) and multiplications. This is called the arithmetic or computational complexity of an algorithm. For instance, summing $n$ numbers takes $n-1$ additions. Another quantity that we may want to describe is the amount of space (computer memory) that is needed. Sometimes the space to fit the input and output of an algorithm is all that is needed, but some algorithms need temporary space. The total required space is called the space complexity of an algorithm.
Both arithmetic and space complexity depend on some description of the input, for instance, for summing an array of numbers, the length $n$ of the array is all that is needed. We express this dependency by saying `summing an array of numbers has time complexity $n-1$ additions, where $n$ is the length of the array'.
The time (or space) the summing algorithm takes is not dependent on other factors such as the values of the numbers. By contrast, some algorithms such as computing the greatest common divisor of an array of integers can be dependent on the actual values.
What is the time and space complexity of multiplying two square matrices of size $n\times n$? Assume that an addition and a multiplication take the same amount of time.
Often we aim to simplify the formulas that describe time or space complexity. For instance, if the complexity of an algorithm is $n^2+2n$, we see that for $n>2$ the complexity is less than $2n^2$, and for $n>4$ it is less than $(3/2)n^2$. On the other hand, for all values of $n$ the complexity is at least $n^2$. Clearly, the quadratic term $n^2$ is the most important, and the linear term $n$ becomes less and less important by ratio. We express this informally by saying that the complexity is quadratic in $n$ as $n\rightarrow\infty$: there are constants $c,C$ so that for $n$ large enough the complexity is at least $cn^2$ and at most $Cn^2$.
This is expressed for short by saying that the complexity is of order $n^2$, written as $O(n^2)$ as $n\rightarrow\infty$. In chapter Numerical treatment of differential equations you will see phenomena that we want to describe as orders of a parameter that goes to zero. In that case we write for instance $f(h)=O(h^2)$ as $h\downarrow0$, meaning that $f$ is bounded by $ch^2$ and $Ch^2$ for certain constants $c,C$ and $h$ small enough.