I also looking for how to explain it. And that what I found.
In WordPress term can be category and tag. That why they use 3 tables.
If you want create similar category and tag:
1. You add ONE record to table ‘wp_terms’, example:
term_id=1, name=Jewelry
2. You add TWO records to table ‘wp_term_taxonomy’:
term_id=1, taxonomy=category
term_id=1, taxonomy=tag
And you can use term Jewelry as category and as tag.
