By "state of nature," Hobbes meant human beings in their natural condition. In that natural condition they are too caught up in suspicion of one another and competition with each other, so they are willing to establish a "social contract" (an implicit agreement) in which they give up freedoms for the sake of a government to rule and provide stability.
Details:
Thomas Hobbes published a famous work called Leviathan in 1651. The title "Leviathan" comes from a biblical word for a great and mighty beast. Hobbes believed government is formed by people for the sake of their personal security and stability in society. In Hobbes' view, once the people put a king (or other leader in power), then that leader needs to have supreme power (like a great and mighty beast). Hobbes' view of the natural state of human beings without a government held that people are too divided and too volatile as individuals -- everyone looking out for his own interests. So for security and stability, authority and the power of the law needs to be in the hands of a powerful ruler like a king or queen. And so people willingly enter a "social contract" in which they live under a government that provides stability and security for society.
Probably the most famous set of lines from Hobbes' Leviathan book describes what he saw as the natural state of human affairs without government -- one in which every individual had freedom, but that meant it was a situation of "war of all against all," or we might say, every man for himself. Hobbes wrote:
In such condition, there is no place for industry; because the fruit thereof is uncertain: and consequently no culture of the earth; no navigation, nor use of the commodities that may be imported by sea; no commodious building; no instruments of moving, and removing, such things as require much force; no knowledge of the face of the earth; no account of time; no arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.
