Plain English Meaning
When the air outside is much colder than normal, your altimeter lies to you. It shows you higher than you really are. The colder it is, and the higher you are above the airport reporting the altimeter setting, the bigger the lie.
Full Definition
Altitude indication errors caused by air that is colder than the standard atmosphere assumed by the altimeter. Because cold air is denser and a column of it is physically shorter than a standard column at the same pressure, the altimeter reads higher than the aircraft is actually flying. The colder the temperature and the higher the indicated altitude above the altimeter setting source, the larger the error becomes, meaning true altitude can be significantly lower than indicated altitude.
Context Anchor
Seen in when planning or flying , checking , and applying cold-temperature altitude corrections.