Karma

Hinduism believes in transmigration of the soul. Such transmigration is what results in reincarnation. This, in short, is the popular theory of Karma.
Clearly, all forms of life on earth do not undergo the same experiences and are not at the same level of existence. Man is the most superior form of life, but there are also billions of life forms which are far less superior than him. Even among us humans, we constantly witness differences in our modes of existence. Some of us are billionaires and some are paupers. Some of us are extremely healthy and some are always disease-prone. There must be a reason for these different experiences that all forms of life go through, even within their own species. Hinduism's answer to this question is the theory of "Karma".
Karma and rebirth are interrelated concepts in Indian philosophy. According to the theory of Karma, we are all part of a cycle of births and rebirths. This cycle has no beginning nor end. We are simply experiencing the results of our own actions in our journey through this cycle. Each spoke in the cycle is a predecessor to the next spoke. When a cycle moves, all spokes move one after the other in a never-ending chain. Similarly, in the cycle of "Samsara", life forms are spokes that evolve from one experience to another, and from one form to another according to their actions. Good actions cause good effects (Law of Cause and Effects), while bad actions cause bad effects. It is as simple as that.
Our actions bind us to this world, and such bondage-causing action is known as "Karma". The bondage refers to the confinement to this "samsara" just as spokes are confined to the wheel of the cycle. While good actions cause us to be reborn to experience the good effects, bad actions cause us to be reborn to undergo pain and suffering. "Yogis", however, are free of karmic actions and reactions, therefore not bound by the cycle of transmigration. Such a state of everlasting freedom from "samsara" is known as "Moksha". Again, the means to achieving such a state of mind cannot be presribed in a "cook book" manner. There is no specific prescription either. If it were that easy, all of us would be free from "samsara" now. Again, some of us probably wouldn't want to be freed from rebirths, even if given the choice. Remember, this is philosophy and not religion. Religions have doctrines, prescriptions and cook books for happiness; philosophy does not. It is what it is!