This article is from the Go FAQ, by Morten PAHLE email@example.com with numerous contributions by others.
In matches between players of different ranking, a handicap is used so
that the game will be balanced. The handicap consists of a certain
number of stones placed on the goban before the game begins. On a
19x19 goban, the difference in ranking gives the number of stones of
handicap. 9 stones is usually the maximum handicap used on a 19x19
goban, although it is fully possible to play with more handicap stones
if black and white agree on this.
A handicap means that two players can both enjoy the game, although
they are of different levels.
In tournaments, players are normally divided in classes ranging over
several rank levels, with handicap given within the class. If 20 Kyu
and 11 Kyu players are in the same class, a beginner at 20 Kyu can win
the tournament in his class (if no handicap were given, the
probability of this would be very small).