It's basically 5 letter hangman. You're trying to guess the correct word, and other words you've used before gets their letters either confirmed or eliminated as options.
If it's in the word but in the wrong position, it's yellow. If it's in the correct position, it's green. If it's not in the word, it gets greyed out where all the other letters are.
The trick with this game, is to choose words that makes it easier to narrow down what the correct word is. For example, if you start with "email" and then "sound", you've hit the vowels and some of the most common consonants. Depending on what you think it might be, you could then go for words that include T, R, C, K, or Y. That should narrow it down to almost guessable.