The short answer
A model can only reason over what is in its context window - the text, tools, and data you place in front of it at inference time. Context engineering is the discipline of assembling that window deliberately: choosing what to include, what to leave out, and how to arrange it so the model has exactly what the task needs and little else.
The term was popularized in 2025 by practitioners across the field who argued that the hard part of building with LLMs had shifted. It is less about the wording of one prompt and more about the system that feeds the model the right context, at the right time, on every turn.