Consider a dielectric placed in an  external electric field E₀ (say between the plates of a charged capacitor). Due to external field, there will be shifting of the centres of gravity of positive and negative charges. The positive charges are displaced  in the direction of the applied field whereas the negative charges will get displaced in a direction opposite to the applied field E₀ ( try to make the figure). Therefore, the positive charge is induced on one surface while negative charge on other.

This phenomenon of appearance of the charge on the surfaces of dielectric induced by the external electric field is called polarization  or dielectric polarization.

The charge  on the plates of the capacitor is called free charge and charge induced on the surfaces of the dielectric is called bound charge.

We can also say that when the  atoms are placed in an electric  field, they acquire an induced electric dipole moment in the direction of the field.  This process is called the dielectric polarization and atoms are said to be polarized.The induced dipole moment p is proportional to applied electric field E,

that is,

p proportional to E

or p = αE

where α is proportionality constant known as molecular or atomic polarizability of dielectric.

Also, the induced surface charges appear in such a way that the electric field Ep set up by them opposes the external field E₀. The resultant field will be

E = E₀ – E_p (1)