Official Aviation Definition
An altimeter setting (often referred to in ICAO terminology as QNH) is the local station barometric pressure adjusted to mean sea level. Entering this value into the Kollsman window of a barometric altimeter ensures that the instrument accurately reads airport elevation when on the ground.
In Simple Words
Because air pressure changes with the weather, pilots dial the current local air pressure into their altimeter so it shows their true height above sea level.
Real-World Flight Example
The tower controller instructed the crew on approach to set altimeter 29.98 inches of mercury (1015 hPa).