Frequency capping is putting a limit on the number of times an ad is shown to an individual.
This means that users can be shown Ads from this campaign dozens of times per day. Without frequency cap, campaigns can leave users feeling annoyed or irritated. This ultimately has a negative impact on your campings because over-exposure can cause "banner blindness" - where users subconsciously ignore ads they see too often.
Campaigns without a frequency cap often suffer from a reduced Click Through Rate (CTR). A low CTR has a negative impact on quality scores and average position, which negatively impacts your performance by producing higher CPCs and lower Impression Shares.
Frequency capping is particularly important for remarketing campaigns since too high a frequency can make users feel as though they're being "followed" around the web. As mentioned above, repeat exposure to similar ads can be irritating and should be avoided where possible.