What is the meaning of 'compounded' & 'uncompounded'?

Some texts speak of 'compounded' phenomena etc. - What does it mean for something to be 'compounded' or 'uncompounded'? For the former, does it just mean 'things that are composed of other things, which themselves are composed of smaller things, ad infinitum? For the latter, something 'indivisible'? - If something is uncompounded, how can it exist as a 'thing'? - Why are some things compounded or not? What makes them that way