Implicit bias refers to unconscious associations people make between groups of people and stereotypes. The video uses the analogy of peanut butter and jelly to illustrate how implicit biases are formed unconsciously through people's experiences and environment. While having implicit biases does not necessarily make one racist, it is important to recognize implicit biases exist and work to address them in order to avoid unfairly associating or treating people differently based on group membership. One way people can combat implicit biases is by becoming aware of their own "blind spot bias" and taking steps to reduce prejudices.