🧑‍🤝‍🧑Threshold

A multisig account consists of two parts:

• The signatories

• The threshold

The signatories are the different accounts that constitute the multisig and can be from 2 to 100. This is the number of accounts that can issue transactions from the multisig if an adequate number of the other signatories agree.

The threshold is the number of signatories that need to approve a transaction for it to happen. Usually, it is at least the majority of the signatories. The minimum threshold can be 2, and the maximum is the number of signatories.

So, suppose a multisig has, for example, 5 signatories and a threshold of 3. In that case, we say it's a 3-of-5 multisig, which means that from the five signatories, three need to approve a transaction for it to happen (including the one who initiated the transaction).

It's important to make clear that multisig accounts don't have a mnemonic phrase or private key of their own. They are controlled exclusively by the signatories. Also, the same set of signatories with the same threshold will always produce the same multisig.

Finally, the signatories of a multisig can be any kind of account. They can be a simple account in the Polkadot extension or a Ledger account controlled by a single person; they can be multisigs themselves, anonymous proxies, etc.

Source - Polkadot Wiki