Polymorphism, literally 'many forms', is the principle that one interface or superclass type can refer to objects of many different concrete types, each responding to the same method call in its own way. It is the payoff of inheritance and overriding: you write code against a general type and it works correctly for every specific type, present and future. Java provides two complementary tools for building these general types, interfaces, which declare a contract of methods a class promises to implement, and abstract classes, which provide a partial implementation meant to be completed by subclasses.
Understanding polymorphism, interfaces, and abstract classes matters because they are what let you write flexible, extensible code: a method that accepts a general type can process any current or future implementation without change, which is the foundation of decoupled, maintainable design. Choosing between an interface and an abstract class, and writing code to general types rather than concrete ones, is among the most important design skills in object-oriented Java.