Here we have converter, to make a word into a polynomial.
The way it works is that it takes each letter of a word and converts it to a number. So we get that
$$a = 1, \ b = 2, \ c = 3, \ldots$$
and so forth. Then by using the numbers we got from the word we create a polynomial with coefficients that are those numbers.
Lets say we have a word with $n$ letters, if we then assign a number like above to each of the letters in the word, say $a_1, a_2, \ldots, a_n$. We then generate the polynomial
$$f(X) = a_1 \cdot X^{n-1} + a_2 \cdot X^{n-1} + \ldots + a_{n-1} \cdot X^1 + a_{n}.$$
What we have done now is encode a word into a polynomial!
Why is this smart?
Lets say you have encoded your secret word "cat" into a polynomial, then you get the polynomial
$$f(X) = 3 \cdot X^2 + 1 \cdot X^1 + 20$$
from this you make $3$ points of the form $\left(x, f(x) \right)$
$$A = (1, 24), \ B=(2, 34), \ C = (3, 50)$$
and you give them to your friends. Note that they don't know the secret word they only have they points you gave them.
Suddenly Dr. Evil has kidnapped $2$ of your $3$ friends because he wants to know you secret word. But you don't have to worry (except for your friends) because Dr. Evil will never be able to uniquely determine all the coefficients in your polynomial because of the way equations with multiple variables work.