In those days (near the end of the 16th century) music used modes instead of the modern system of major and minor keys. Sometimes the music would not sound right unless a note was sharpened or flattened (raised or lowered a semitone). For example, to go down from the note B to an F would have sounded bad, so the F would need to be an F sharp. The composer who wrote the music down might not bother to put the sign for F sharp. He would expect the performer to know that it should be an F sharp and not an F. This is what is called musica ficta.
Gradually it became more and more necessary for composers to write exactly what notes they wanted. The modern system of keys was developing. They developed the system of key signatures and accidentals (sharps and flats which are not in the key signature, but written as and when they are needed). The practice of musica ficta gradually ended.