Ah one of the hard ones.
OK, put simply, every living cell carries information in the form of RNA (Ribonucleic Acid) or DNA (Deoxyribonucleic Acid). DNA is the more advanced form and is used by all but the most primitive bacteria.
Every cell in your body apart from your hair and the outermost layer of your skin (both dead) carries a strand of DNA one metre long, which is doubled (one copy from your mother, one from your father).
This is information which, correctly interpreted, gives skin tone, eye colour, hair colour, sex, left-or right handed, height, weight, (Both of which can be changed by environment) blood group, how your major organs are put together, how they work etc., etc.
Genetics is the study of this inbuilt information.
On an informal basis we've been doing things like this for years with animals (farm animals, dogs, all of which are much the same) and plants (food crops) by selective breeding.
Manipulation of the DNA itself is still in its infancy, but the potential for immunity to disease and other, less-savoury projects is immense.