The holographic idea came out of black hole thermodynamics. Out of that era when the
Black Hole Wars were raging. This was essentially an argument over whether black holes destroyed information. Another thing that came out of it was Hawking's prediction that black holes gave off radiation.
One of the many weird results of all the physics that was done at that time was the discovery that (given certain minimal assumptions) the total entropy of a black hole was proportional the
square of the radius and not, as usually calculated, the cube.
Since entropy can be thought of as information, this means that the maximum amount of information that can be contained in a black hole is proportional to the area of its horizon.
Now, since a black hole is the densest possible configuration of matter, it follows that the maximum amount of information contained in the
universe is also proportional to the area of its surface.
That's it. That's all it means.
However, it swiftly got co opted by the new-age quantum illusion magic spoon matrix crowd, who declared that we're all living in an alien simulation.
The fuckers.