Anchoring refers to the tendency for an initial piece of information to set the terms for future negotiation (see "Anchoring" for a longer definition and the obligatory sailing joke). Anchoring and adjustment takes this process a step further.
An anchor sets the starting point and further information drives the adjustment. In a negotiation, the first bid typically anchors the discussions, setting the terms for future bidding. The adjustment comes as you receive further information and adjust your value judgement based on the additional data.
For example, you inherit a guitar pick collection from your eccentric uncle. Not valuable guitar picks used by famous rockers. Just a large number of guitar picks that he collected over the years (some of them admittedly quite nice; you might keep the one with a picture of Elvis on it).
Anyway, someone offers you $100 for the collection. It's the first bid, so that provides the anchor. Other bids start coming in: $8, $12, $0.45. At first, you weren't quite sure about that $100 bid, but after adjusting your expectations with the subsequent offers, you're pretty sure the $100 bidder might have lost their mind and you should take the offer as quickly as you can.