A prism is a special piece of glass, crystal, or plastic that bends light. The light bends (or refracts) because it moves slower in the glass, crystal or plastic than it does in air. If different colors of light move at different speeds, each color bends a different amount. This splits the light into lots of different colors called a spectrum. This spectrum has the same colors as a rainbow does. Rainbows are also made by bending light. They happen when light is bent by tiny drops of water floating in the air. If the light doesnt come out when you shine it into the prism, it is called internal reflection.
Prisms are used in binoculars to bend the light. This lets the tubes of the binoculars be short. Sometimes prisms are used to reflect light instead of bending it. Some cameras use a prism to send light to the viewfinder, so the photographer can see what will be photographed.