Popular sovereignty was a policy that allowed each territory to decide whether it would be slave or free at the time that it incorporated and created a government. This policy was included in the Kansas-Nebraska Act.
Before the Kansas-Nebraska Act, the issue of slavery in these areas had been decided by Congress. Congress had decreed, in the Missouri Compromise, that these areas should be free. But the Kansas-Nebraska Act overturned this. It allowed the territorial governments to decide the issue of slavery. This was extremely controversial because it reopened the issue of slavery in the territories and it led to conflict in Kansas ("Bleeding Kansas") over the issue.
Kansas Nebraska Act of 1854 applied the principle of popular sovereignty to the territories.