An electrical AC supply is ideally a pure sine-wave of either 50 or 60 Hz fundamental frequency and all electrical equipment is designed for optimal performance on this supply.
Harmonics are voltages and currents which have frequency components that are integers multiple of the fundamental frequency - polluting the pure sinusoidal waveform.
Power electronics such as those used in rectifiers, variable speed drives, UPS, lighting dimmer switches, televisions and hosts of other equipment, draw current in a non-sinusoidal fashion.
This non-sine current interacts with the mains supply and distorts the voltage to a greater or lesser degree depending upon the strength or weakness (fault level) of the supply.
Generally, the greater the amount of installed electronic power switching equipment on-site, the greater the degree of harmonic distortion.