Monophony is a capability of an instrument meaning: can create either zero or one sounds at a given time. Polyphony is a capability of an instrument meaning: the instrument can create multiple sounds at the same time. For example, a bassoon is a monophonic instrument because the player can only have one sound at a time. A piano is polyphonic because on a piano we can play multiple notes at the same time.
Polyphonic instruments have a number of voices. The number of voices determines how many sounds the instrument can create at the same time. If we signal a note past the maximum, then either the new note won't play or the oldest note cuts out.
Polyphony takes extra consideration when building a synthesizer or other sound module. Normally, polyphony means we need to clone several modules in our synthesizer each time we receive a note.