A more thorough explanation:

In general, a principal is a person or thing that is more important than others for a specific purpose. Here are some specific contexts:

A principal is someone who gives permission to another person to act on their behalf. This person is called an agent, and they have a fiduciary duty to act in the best interest of the principal. For example, a company may authorize an employee to negotiate a contract with a client.

The principal is the basic amount of a debt or investment, which does not include any additional earnings like interest or profits. For example, if you borrow $100 from a friend and agree to pay back $110 in a month, the principal is $100.

A principal is someone who has primary responsibility to perform an obligation. For example, if you sign a lease agreement with a landlord, you are the principal responsible for paying rent and following the terms of the lease. If you fail to do so, the landlord can take legal action against you.

The principal of a trust is the corpus, or the assets that fund the trust. For example, if you create a trust fund for your child's education, the principal is the money you put into the fund.

These examples illustrate how a principal is a person or thing that is more important than others in a specific context. It can refer to someone who authorizes another to act on their behalf, the basic amount of a debt or investment, someone with primary responsibility to perform an obligation, or the assets funding a trust.