What is the explanation of this quote from Aristotle's Poetics, "For our pity is a wakened by undeserved misfortune, and our fear by that of someone just like ourselves"?
Poetics by Aristotle
A perfect tragedy should, as we have seen, be arranged not on the simple but on the complex plan. It should, moreover, imitate actions which excite pity and fear, this being the distinctive mark of tragic imitation. It follows plainly, in the first place, that the change of fortune presented must not be the spectacle of a virtuous man brought from prosperity to adversity: for this moves neither pity nor fear; it merely shocks us. Nor, again, that of a bad man passing from adversity to prosperity: for nothing can be more alien to the spirit of Tragedy; it possesses no single tragic quality; it neither satisfies the moral sense nor calls forth pity or fear. Nor, again, should the downfall of the utter villain be exhibited. A plot of this kind would, doubtless, satisfy the moral sense, but it would inspire neither pity nor fear; for pity is aroused by unmerited misfortune, fear by the misfortune of a man like ourselves. Such an event, therefore, will be neither pitiful nor terrible. There remains, then, the character between these two extremes- that of a man who is not eminently good and just, yet whose misfortune is brought about not by vice or depravity, but by some error or frailty.
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The quotation in your question seems to be a paraphrase of a clause in the middle of the translated passage I've added in the space below your question. That clause is:
for pity is aroused by unmerited misfortune, fear by the misfortune of a man like ourselves.
This clause appears in a passage on what heroic type is best suited to the needs of tragedy. Aristotle says the correct heroic type is not (1) the shock of a good and upright man brought into adversity and trouble nor is it (2) the bad man who makes it good because that is neither moral nor tragic nor is it (3) the villain who is brought to punishment. The quotation you ask about explains why tragedy cannot have a hero who is a villainous person brought to judgement.
Aristotle says that such a villainous hero might provide a moral tale but that his suffering would arouse neither pity nor fear. Aristotle then observes that pity is aroused when undeserved misfortune befalls a person who is just like we are. He says fear is aroused when undeserved misfortune befalls someone like us who is neither wholly virtuous nor wickedly villainous.
Aristotle is suggesting that people feel shock when the good suffer, justice when the wicked suffer and only feel pity and fear when undeserved harm comes to someone they can relate to as a good and moral person who has a flaw or two, someone in a category like themselves. Feeling pity and fear is important in tragedy for the purpose of catharsis, which is defined variously as (1) the just outcome for the hero in light of his mistakes or (2) a release within the audience of tendencies like the hero's so there will be no drive to act them out.