Liquidity is the depth of the water. It is the amount of an asset you can buy or sell before your own order starts pushing the price against you. Deep water absorbs a big ship without a ripple; shallow water lurches.
Almost everything else in this glossary is a consequence of liquidity. Slippage, peg stability, how safely a large holder can exit, all of it is really a question about how deep the pool is at that moment.