Moral relativism is an ethical theory that holds the view that there are no objective ethical truths and that moral facts are dependent to a particular individual, group, or society. This view says that a moral fact for one culture or society may be viewed as bad or not morally acceptable in another and vice versa. In other words, this theory is saying that there is simply no such thing as moral absolute.
The individualistic form of this view, which means that morality is dependent on every individual, is known as ethical subjectivism. In a societal level, in which moral facts vary between cultures, moral relativism is called cultural relativism.
To better understand moral relativism, we need to know about the nature of objective truths. Truths that are deemed independent of our beliefs or perceptions are called objective truths. A typical example is the activity of the moon around the Earth. The moon orbits the Earth regardless if people believe it or not. Another example is the orbit of the Earth around the sun. There was once a prevailing view that it was the sun which circled around the earth. Modern science was able to prove it was the other way around. It was then an objective truth, i.e. that the Earth orbits around the sun even though majority of the people then believed the opposite.
Subjective truths, on the other hand, hold at least in part due to our beliefs and individual perceptions. The taste of pork, for instance, varies from person to person. Other people find pork delicious while others find it repulsive, either due to sensual perception or belief. Whether pork is delicious or not is considered subjective.
This is the stance of moral relativism. Ethical truths are viewed as subjective rather than objective. Lying can be considered good or bad, depending on the individual, society or culture. It may be that for some people, lying is routine and acceptable, while for others it is not.
If taken in mild form, ethical theory is right, even obvious. Different people have different moral obligations–I have a responsibility to pay my bills; you do not. Everyone is immersed in his or her unique circumstances and these factors affect our decision-making including our view regarding what is morally right or wrong. It can therefore be said that morality depends on the circumstances. A more serious form of moral relativism, the usual meaning of the term itself, is that moral truths are relative to people or groups of people and not merely relative to circumstances. This can be problematic in a real life scenario and can even be a cause for anarchy. If everyone perceives his opinion or perception as the only right one, the world would be very different than what it is right now.
In the case of paying the bills, moral absolutism is stronger and more consistent since you are supposed to do everything you can to pay your bills properly. Repaying debts is a moral absolute and is the very essence of the credit card business. Everyone has the duty to repay their debts.