A charm is a type of enchantment that causes an object to behave in a way that is not otherwise normal for that object.For example, the Colour Change Charm causes something to flash different colours; the Levitation or Hover Charm causes an object to levitate; the Cheering Charm improves upon a creature's mood.
A Charm might cause something to flash different colours. It might cause an object to levitate or even fly through the air. Charms can make a person laugh or dance or even create a bubble of breathable air around a person's head. In all of these cases, the object or the person doesn't really change, they just do something unexpected.
Some Charms can be extremely powerful. The Fidelius Charm, for example, can completely hide a person or a place in such a way that no one can find them unless they are given the location by a Secret Keeper. Memory Charms can be so strong that they completely remove a person's memory or even damage his or her mind permanently.