Edge conditions define what rules cells on the edge of the grid obey. The possibilities that are considered here are "wrap" and "free." When edge conditions wrap, cells on the grid is considered to be a torus which has edges that wrap around to each other. This creates a situation in which a cell on the far right of the board has as its neighbor cells on the far left of the board, and vice versa. The same conditions apply to the top and bottom edges. Alternatively, when the edges are free, cells on the edge have a smaller neighborhood than cells in the center because the cells on the edge have no neighbors to their outside.
This is easiest to see in a graphic which shows the neighborhoods of a cell on the edge when the conditions are set to "wrap" and when they are set to "free."