In layman's terms, I've always said an API is like a translator between two people who speak different languages. In software, data can be consumed or distributed using an API (or translator) so that two different kinds of software can communicate. Good software has a strong translator (API) that follows rules and protocols for security and data cleanliness.
I"m a Marketer, not a coder. This all might not be quite right, but it's what I"ve tried to express for about 10 years now...