Story Points Estimation technique is based on relative sizing where the team members assume the effort + complexity + Risks (unknowns, penalties, missed opportunity, etc.) to come up a story point number usually based on the Fibonacci series. ( 0, 1, 2, 3, 5, 8, 13, 21, .....)
Product Owner explains a product backlog item, the Developers offer story point estimation based on their current understanding of the work involved, they aggregate the story points offered by developers and based on consensus / average, define a stoy point number for each PBI.
Story Points Estimation technique was invented by Ron Jeffries around year 2000.
In 2019, Ron Jeffries updated his advice on the use of Story Points.
See also: Empiricism