Any live cell with 2 or 3 live neighbors stays alive to the next generation. This rule prevents cells from dying when they are in a stable or moderately crowded environment.
Any live cell with fewer than 2 live neighbors dies (as if by underpopulation). This occurs because the cell is too isolated to survive.
Any live cell with more than 3 live neighbors dies (as if by overpopulation). This happens because the cell is in an overcrowded environment.
Any dead cell with exactly 3 live neighbors becomes a live cell (as if by reproduction). A new cell is "born" in an environment with the right amount of neighboring cells.