I usually explain version control as working just like a library with a small twist. Imagine that this library holds paper notebooks that are partially used. You can go to the library, checkout a notebook, and write and erase parts of it while it is in your possession. Just like a library, if you have the original notebook, no one else can check it out -- you have exclusive rights to the notebook.
There is a bit of a twist that you can think of as working like an attentive librarian: every time the notebook is checked in, the librarian makes a complete copy and stores it in the reference section of the library. At any time, regardless of whether the original notebook is checked out, anyone can go to the reference section and read the reference copies of old versions. And, just like a regular library reference section, you cannot check those old copies out; they are read-only.
*only applies to us Dvorak users.