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Caps are arbitrary numbers set by the game developers that limit the upper level of your stats.
There can be hard caps and softcaps. Hard caps are, it goes no higher. Hard Cap is 100, you use gear that gives 6 more health, you still have 100 Health. Soft caps are, it can go higher, but everything over say 100, you gain at half rate, so you get gear that gives you 6 more health, you might only get 3 more.
Caps can be used to balance the game, encourage build diversity and reign in excesses in builds that players can find and exploit.
Edited by Nestor on February 8, 2017 10:41PM
Enjoy the game, life is what you really want to be worried about.
PakKat "Everything was going well, until I died"
Gary Gravestink "I am glad you died, I needed the help"
Well generally a cap means the max number. Some of these are absolute, like the gear cap where you can't find or make higher, and some are effective, like the armor cap where you can go above but you won't mitigate more after that point.