In current usage, cancel culture is a common form of social protest, in which a person --usually a celebrity -- who has expressed an unpopular opinion or done a bad thing is 'punished' by losing followers.
In the mid-2010s, it became popular to used the term "canceled" or "#cancel" to indicate a personal boycott of a person, place, or thing. 'Cancel culture' theoretically refers to this trend, but most people will use the term 'cancel culture' pejoratively, and few people self-identify as part of the cancel culture.
This term is a bit confusing, because those using it generally speak as if there is some sort of organization behind cancel culture. Often there is -- for example, after a number of sexual abuse charges against R. Kelly, Spotify removed him from their playlists. But at the same time, most people complaining about cancel culture seem to be just as annoyed at individuals who make statements like "I don't listen to R. Kelly anymore because he's a terrible person". This easy flow of blame from specific questionable cases to anyone-who-disagrees is so common that comments on cancel culture are often treated as knee-jerk bullshit.
It is worth noting that this is not a new phenomenon, having been part of our culture for generations (e.g., Aaron Burr, the Black Sox Scandal, Roscoe "Fatty" Arbuckle, McCarthyism, the Beatles Jesus scandal, etc.). This is perhaps inevitable; humans have only a limited amount of attention to give, and a large pool of potential things to attend to. The marginal difference in utility between celebrity A and celebrity B may be much less than a crime or an off-color remark.
However, it is true that this sort of consequence is unpredictable, unevenly distributed, and often unfair. Whether the solution to this is better information and better coordination, or less importance placed on celebrity's personal choices, is a matter of personal preference.