Swiss Linguist Ferdinand de Saussure propounded the sign theory of language, which was published as class notes by his students posthumously in the book Cours de Linguistique Generale (Course in General Linguistics) in the year 1916.
According to Saussure, language is nothing but a complex system of signs. By a sign, we mean something that stands for an idea or a concept. For example red color is an indicator of danger, green light stands for go, etc.
Let us explain main points of Saussure's sign theory using a simplified example. If we want to represent anything like “tree” (just imagine the brown trunk structure with green leaves, flowers, etc. that you have already seen in parks or elsewhere), we simply write a word with four letters: t-r-e-e.
Now, these four written letters (t-r-e-e) can be called as signifiers as they signify a “concept”, i.e. the actual, physical tree (that you imagine looking at these letters). Note that these individual letters (just say the letter “t”) are also signs that combine to form the signifier “tree”. This is the first point of his theory.
Also, the relationship between signifier and signified is arbitrary, i.e. there is no real, understandable relationship between the sign and what it signfies. Have you ever thought why these four letters t-r-e-e only represent the concept “tree”? There is nothing in the word itself or letters that looks like or resembles the actual tree. It is purely a matter of convention. Each community chooses to say and follow these conventions. This is why every concept is called with different names in different languages.