In its most basic definition, a 2 step is a rev limiting device that you install on your car that has 2 stages, one with a lower RPM and the other at a higher RPM. The lower RPM limiter is usually used for launch control while the higher RPM limiter will be located at redline or slightly over redline. This is to avoid excessive revving and engine damage.
The 2 step also cuts the ignition rather than cutting the fuel like the factory rev limiters. This is usually cut at a specific rpm lower than the main rev limiter for the purpose of building boost for launching better from a standstill. Once the ignition is cut it allows the unburnt fuel to enter and burn in the exhaust manifold and turbine housing. This spools the turbo and makes boost even though the engine isn’t under load. By limiting the revs, whether it being on the 2nd stage for engine protection or 1st stage for better launches it all leads to a better driving experience.