From my understanding it’s the concept of trust. Basic passwords are complete trust that both ends are who they say they are, on a device that is trusted, and passing the password over the wire is sufficient and nobody else tries to violate that trust. Different types of techniques over time have been designed to reduce that level of trust and at a fundamental level, passkeys are zero trust. This means you don’t even trust your own device (except during the initial setup) and the passkey you use can only be used on that particular device, by a particular user, with a particular provider, for a particular service, on their particular hardware…etc. If at any point trust is broken, authentication fails.

Remember, this is ELI5, the whole thing is more complex. It’s all about trust. HOW this is done and what to do when it fails is way beyond EIL5. Again, this is from my own understanding, and the analogy of hardware passwords isn’t too far off.