When astronomers discovered Pluto in 1930, they were excited to announce it as the 9th planet in the solar system. The problem is, back then we didn't know that Pluto is just one of many objects floating in a big icy belt we call the Kuiper belt (like the asteroid belt, but much further out).
In order for something to be called a planet, it needs to pass 3 tests:
1. It needs to orbit the Sun (Yep, Pluto does this)
2. Its gravity needs to be strong enough to make it round (Pluto wins here too!)
3. It needs to have 'cleaned up' it's surroundings (oh no!)
The reason Pluto was demoted is because it lives in a really rocky and dusty part of the solar system which it has been unable to clean up.
In fact, we now know of loads of objects of similar sizes to Pluto in the Kuiper belt, so instead of thinking of Pluto not being a planet anymore... you can think of it as the king of the Dwarf Planets!