Humidity refers to the amount of water vapour in the atmosphere. If there is a lot of water vapour in the air, the air is said to be humid. Relative humidity is measured as a percentage. For instance, humidity of 40% means that the air is holding 40% of the total amount of water it can hold at this temperature.
Humidity is measured using an instrument called a hygrometer. Look at the image below. This is one type of hygrometer.
Today there are modern hygrometers like the one shown in the picture below.