Using leverage means investing with money that isn't yours (borrowed) in addition to your own capital, so you can control a larger position than you could afford with your own funds alone.
The multiplier effect
With 5x leverage, a 10% move in your favor becomes a 50% gain on your capital, but a 10% move against you becomes a 50% loss — and beyond a certain loss level you may receive a margin call or face forced liquidation.
Leverage in DeFi
In lending protocols like Aave, leverage is measured with the "health factor": as long as it stays above 1, the position is safe; if it drops below that, the protocol automatically liquidates the collateral to cover the debt.
Rule of thumb
The higher the leverage, the smaller your margin for error before liquidation. It's a tool that amplifies the outcome of your decisions, good and bad alike.