What is meant by a two party system?

In some countries, power usually changes between two main parties. Several other parties may exist, contest elections and win a few seats in the national legislatures. But only the two main parties have a serious chance of winning the majority of seats to form a government. Such a party system is called a two-party system. The United States of America and the United Kingdom are examples of the two-party system. 

Further Reading:

• Political Parties And Pressure Group
• List of Political Ideologies