Examine the neck of your guitar. You'll notice there are metal strips running across it's entire surface. These pieces of metal are referred to as "frets" on a guitar. Now, here's what you'll need to keep in mind: the word "fret" has two different meanings when used by guitarists. It can be used to describe:
The piece of metal itself
The space on the neck between one piece of metal and the next
To further explain, the area of the neck between the nut and the first strip of metal is referred to as the "first fret". The area on the neck between the first and second strip of metal is referred to as the "second fret". And so on...