angular resolution
Look at a car's two headlights far down a road at night and at first they blur into a single glow; only as the car nears do you see two separate lamps. The angle at which two points just become distinguishable is a measure of resolution. For a telescope, angular resolution is the smallest angle between two objects that it can still show as separate — its ability to reveal fine detail.
Angular resolution is measured in tiny angles, usually arcseconds (an arcsecond is 1/3600 of a degree, about the width of a coin seen from four kilometres away). A telescope cannot do better than its diffraction limit, which improves with aperture: roughly, the smallest resolvable angle in arcseconds is about 0.025 times the wavelength in nanometres divided by the aperture in metres. For green light, a 1 m telescope can in principle resolve about 0.13 arcseconds. Bigger apertures resolve finer detail, which is a second great reason — beyond light-gathering — to build large telescopes.
On the ground there is a cruel catch: the turbulent atmosphere blurs starlight so that even a giant telescope rarely beats about one arcsecond of resolution, throwing away most of its potential sharpness. This is why we put telescopes in space or fit them with adaptive optics. Linking telescopes together as an interferometer can reach far finer resolution still, because the effective aperture becomes the distance between them.
The human eye resolves about one arcminute (60 arcseconds); Hubble, free of the atmosphere, resolves about 0.05 arcseconds — sharp enough to read a licence plate from roughly 1,500 km away.
Resolution is set by aperture — but ruined by air.
Resolution and magnification are not the same. You can magnify a blurry image as much as you like; once you exceed the resolution set by aperture and seeing, you only enlarge the blur (empty magnification).