Passive income is a form of income that you dont work for, at least in the traditional sense. Things like income from royalties and real estate. That sort of thing.
The problem with earned income from the average 9-5 job, is that the amount you are paid is directly related to the amount you work. Take for example, working in a fast food joint for minimum wage at say $5 an hour. The max you can work is 8 hours a day, 7 days a week, so the most you can earn in that week is $280.
With passive income, its pretty much limitless how much you can earn. If you write a book and recieve a royalty of 5 cents for every book sold and 1 million sell, then you've made $50,000. All you had to do was write one book, maybe it would take a year to write, but every sale from that point on earns you money.
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