A counterflow chiller runs hot wort through an inner tube while cold water flows through an outer, surrounding tube in the opposite direction — the wort exits the far end already cooled, rather than an immersion chiller's approach of cooling a whole static volume of wort in place inside the kettle itself.
Why "counter" flow specifically matters for efficiency
Running the two liquids in opposite directions (rather than the same direction) keeps a meaningful temperature gradient present along the entire length of the exchanger, since the coldest incoming water meets the already-cooled, near-exit wort while the warmest incoming wort meets water that's already picked up some heat further downstream — a more efficient heat-transfer arrangement than same-direction flow would produce for an identical tube length.
The cleaning trade-off that comes with faster chilling
A counterflow chiller generally cools wort faster than an immersion design and works naturally with a continuous-flow setup straight from kettle to fermenter, but its internal passages aren't visible the way an immersion coil's exterior is — proper cleaning (typically flushing hot cleaner and sanitizer through the wort-side passage after every use) matters more here specifically because residue buildup inside an enclosed tube can't be checked visually the way it can on an immersion chiller's exposed coil.