Also called: filter fraction
In plain English
Selectivity is the fraction of rows a condition is expected to keep — a number between 0 and 1. A selectivity of 0.01 means “this filter passes about 1% of the rows.”
Why it matters
Every plan decision — index versus sequential scan, join order, join method — is built on selectivity estimates. They are derived from the column statistics, so if the statistics are stale or skewed, selectivity is wrong, and the plan built on it is wrong.