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Neo is the One
Neo is the One from the Matrix. He has the ability to bend the matrix to his will.
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The Matrix is a computer system
The Matrix is a computer system that is similar to virtual reality systems. It is a stimulation of life as it was in 1990s and the early 2000s. The system also holds people who are used as energy sources for the machines which are run by the Matrix.
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Most people live in the Matrix
Most of the people are living in the Matrix, as it stimulates real life without ever knowing that they have lived and died as energy sources.
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Some people escape
Some people escaped from the Matrix like Morpheus. Others are born out of people who weren’t in the matrix as naturally born people. People like Morpheus recruit others from the Matrix. (See Logan (2017) Movie Explained)
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There was a prophecy
There was a prophecy that someone (The One) would be able to restore the balance between the machines and humans. Some people like Morpheus believed in this prophecy.
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Zion is the promised land
Zion, the place where the final battle between humans and the machines would happen, is the promised land. (See The Matrix (1999) Movie Explained)
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People control machines that aren’t programmed
People, like Morpheus, control machines that aren’t programmed with the Matrix like the ships and the giant robots that they use to fight the machines.
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The Oracle is a computer program
The Oracle is a computer program designed by the Matrix. However, that program is very powerful that it can predict the future actions that would happen in the Matrix.
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Agents are viruses
Agents are viruses that help identify outsiders from the real world. One of those agents, Agent Smith, evolved into a more powerful program. That program sought to gain control over other programs like the Oracle.
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The Architect is the designer program
The Architect is the designer program that built the Matrix.
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There were other Neos before
When Neo meets the Architect, he shows him that were were other Neos before. He shows him that the meeting between Neo and the Architect happened many times before.
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Agent Smith takes control
Agent Smith takes control over many of the important systems in the matrix. He also presumes control over one of the people living in the real world and transforms there. Agent Smith becomes a threat to the Matrix and the people living in the real world.
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Neo ends the war
Neo speaks to the Architect one more time to tell him about Agent Smith who is seeking to gain control over the Architect itself. Neo’s deal was to end the war and he will fight Smith and end him.
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Agent Smith transforms into Neo
Agent Smith uses the Oracle program to fight Neo. Neo lets him defeat him so that the virus would break. The war between Machines and Men ends then and everything returns to normal where people live in Zion and the machines control everything else.