Have you ever lived in a place that has to much population? In other words there the place is overpopulated. As a matter of fact this causes limited resources which then leads you to competition By competition i mean that you would have to fight for all of your resources. Not necessarily fight, but you will have to find a place to hide and find all of your resources.
I believe competition is used mostly when you're an animal. An animal has to always find food and if there are many types of animals that eat the same thing then they are going to have some trouble. For example lets say that you're a snake in the forest, and if the place is overpopulated with snakes there will be competition.