1) Capacitance refers to an object's ability to store electrical charge. A capacitor consists of conducting plates separated by an insulator and is used to store electrical energy.
2) The capacitance of a parallel plate capacitor depends on the plate area, distance between plates, and the dielectric material between the plates - with larger areas, smaller distances, and higher-permittivity dielectrics increasing capacitance.
3) When a dielectric is placed in a capacitor, it polarizes under the electric field and reduces the overall field strength. This lowers the voltage needed to store a given charge, effectively increasing the capacitor's capacitance.