Hi Hiren!
Great question! "Parametric design" gets thrown around a lot nowadays and I believe the general understanding of people is "something-non-standard-curvilinear-Zaha Hadid-design", which is only partially true. Hadid architects use a lot of parametric design techniques in their projects, but the architectural style they use in their buildings has little to do with parametric design.
Parametric design simply means "design using parameters or variables." These parameters control the outcome of your design. Now, this is different from "Explicit design", this way of designing you're probably familiar with if you've used Rhino or Sketchup before. It just means you're the one making the changes to the geometry DIRECTLY. Do you want to have a stair go from here to there? You model that directly, using explicit modeling techniques like extruding offsetting extending trimming etc.. Do you want the height of a wall to be a bit more? You model that directly. Do you want to have a window here? You model that directly etc. etc.
But here is the thing, what if you wanted 50 windows, or 100 or even more? You could do this manually of course, but what if you don't like the size or position or orientation? You'd have to start all over (you could use a block, but even that method has its limits)What if you'd like to gradually change the size of the windows reacting to direct sunlight or cooling demands (or just a fancy pattern you had in mind). Or doing a structural analysis and changing the column and beam sizes according to the analysis result.
Here is when parametric design really shows it's potential. Instead of manually and directly model these things, you let your design be controlled by these parameters. Parameters can be anything you want, numbers, 3d points, vectors, planes text. And if you change a parameter that let's say would control the height of your window from "5" to "4", you'd see your window design change.
This is in short what Parametric design is , now obviosly you don't need to use this method for everything sometimes explicit modeling makes more sense (most of the time) A good rule of thumb is if you're repeating a lot of the same tasks over and over in your design everytime you want to change something, it might be a good idea making that part parametric.
Here is a video we made to explain parametric modeling, it's focussed only on geometrical processes, but also documentation (like managing/ordening and printing of huge amounts of Construction Documents) is very easy and accurate using parametric processes.
https://thinkparametric.com/paths/parametric_modeling
I hope it's a bit more clear and good luck!
Arie