A seed in basketball is the number which corresponds to a team's ranking. Seeds work a bit differently in the NCAA and in the NBA. However, in both leagues you want to be the lowest seed possible (1), and there are multiple teams assigned each seed.
In the NBA seeds are determined solely by a team's record. In each conference, the top 8 ranked teams, according to records, make the playoffs. The team with the best record earns the 1 seed, the next best team gets the 2 seed, and so on. Remember that there are two conferences, which means there are 2 number 1 seeds, 2 number 2 seeds, etc.
Playoff matchups are determined by seeds. The top seeded team plays the 8th seed, the 2nd seed plays the 7th seed, the 3rd seed plays the 6th seed, and the 4th seed plays the 5th seed. This rewards teams who perform well during the regular season.
In the second round of the playoffs, in each conference, the highest seeded team plays the lowest seeded team. The two remaining teams face off. For example, if the second round includes the 1, 3, 4, and 7 seeds, the matchups would be as follows: number 1 versus number 7, number 3 versus number 4. This format is called a reseed format, and it's counterpart is the bracket format.
A team could receive a higher seed than their record suggest they are deservant of due to success in their conference playoffs or beating a top team in the regular season. Seeding in the NCAA is much less black and white than in the NBA.
In March Madness the teams are divided into four regions of 17 teams, including the teams which play in the first four. Once the first four is played, there are 16 teams in each region, seeded 1 through 16. This means there are four teams with each seed. The four number one seeds are considered the best school.
Only one number 1 seed has ever lost in the first round. In 2018 the 16 seeded UMBC beat the number 1 seeded University of Virginia. Virginia got its revenge next year when they won the entire tournament!
March Madness uses a bracket format, rather than reseeding. This means that matchups outside of the first round are not determined by seed. Rather, the bracket is set at the beginning of the tournament.