The literal meaning isn't that hard to figure out. Muscle confusion is confusing your muscles. That's the easy part. But what is the point behind it? How does it work? Why would you want to do it? These are the questions I'm here to answer.
I want to stress muscle confusion isn't actually working out. Instead, it is a way of working out and customizing your routines to constantly change and not become stagnant with your body's transformations.
A common situation people find themselves in when they are new to working out and set up a solid exercise regime is instant results (don't feel yourself, this is possible). MOST of the programs that provide the hype and evidence for losing 10 inches in 7 days and 15 lbs in 15 days are legit. In fact it's not that hard when it comes to it. They provide you with everything you need: your diet, your exercises, motivation, when to go to sleep, when to go to the bathroom! The problem with these is after the initial phase (losing 10 inches and 15 lbs or whatever they claim) is that is all you ever lose. You're caught in a stand still, and dead lock, checkmate!
Because your body has adapted to these routines that these people have set out for you. They aren't nearly as effective as they were in the first 2 weeks of adopting your new program, especially if it's your first exercise/workout program. So you can lose that 15lbs in the first 15 days, but after that it will take you months, if not years, to lose another 15lbs with the same workouts! This is where muscle confusion comes in.
We are creatures of habit, and your body is smart enough to realize what your routine consists of if you're rotating the same 3 workouts every week, month after month.
So what's the solution?
The conclusion is generally unanimous: switch your exercise routines. However, the range after when you switch varies, some say after 3 weeks, others say after a month or 5 weeks.
That in itself won't help you. You need to understand what exercises stimulate the muscles that aren't being targeted in your current routine to extremely benefit from muscle confusion and switching routines.