Frequency modulation vs. amplitude modulation: Different technologies to broadcast radio waves. They operate on different frequency spectrums, which is why your radio needs a switch.
The FM means modulated frequencies, which provide the possibility to diffuse in sterio. Also a FM station use higher frequencies than an AM one, that is why you can reach a lot more people with it.
AM (amplitude modulation) carriers alter in amplitude to mimic the audio being sent. FM (frequency modulation) carriers alter in frequency to mimic the audio being sent.