Imagine you have a book written in a language that some readers don't understand. To help them enjoy the story, you can either translate the entire book into their language before they read it, or you can translate it sentence by sentence as they read. This is similar to how programs are either compiled or interpreted.
Compiling is like translating the whole book into the reader's language first. Once the translation is done, the reader can read the entire book quickly without waiting. Interpreting is like having a translator sitting next to the reader, translating each sentence on the spot as the reader goes along. This means the reader can start immediately but might have to wait a little for each sentence.