The Active Matrix LCD is an improvement on the standard LCD; Thin film transistors and capasitors are mounted on a substrate of glass, arranged in a matrix. This glass substrate is one of the sides in the display and each transistor/capacitor circuit is a pixel. To address one pixel you turn on the row and coloumn its on. This opens the transistor and the charge from the column line is stored in the capacitor. This capacitor holds the charge until the next cycle.
This means that the display is almost flicker free. By controlling the charge we can make a grayscale picture. If we add colour filters so that the first coloumn is red, the next green and the third blue and so on, we get a colour display. This LCD type is some times called thin film transistor TFT LCD.