Anti-Aliasing (AA) is a technique used in computer graphics for smoothing out jagged edges (which is the Aliasing issue).

Anti-Aliasing produces a clearer image that looks more realistic. Smooth curves are what we see in the real world. On a monitor that has rectangular pixels, these smooth curves are difficult to render. Because of this, curves in games tend to be jagged.

This problem is solved with AA by greatly reducing the sharpness of the edges, hence a slight blurring effect around the edges of images in games.

Anti-Aliasing works by taking a sample of the pixels around the edges of an image as well as the colors, and then it blends the appearance and makes those jagged edges look smooth, as a real-life object should look like.