Basically, a Rasterized image is an image made up of tiny coloured squares known as pixels. As the image is enlarged the pixels multiply and as it is shrunken they divide. This can result in the edges of the image becoming distorted and in turn the image will lose a lot of quality and compromise the final turn out of the print.

A Vector image is an image that is made up of layers of shapes. These shapes are defined by outlines along which has 'anchor points'. The 'weight' on these anchor points determines the amount of curve the line has. As you enlarge and shrink an image the anchors gain and lose weight meaning that the shape itself will constantly keep its quality no matter how many times its enlarged or shrunken.