Simply put, Fully Homomorphic Encryption means that given two ciphertexts c1 and c2 which encrypt messages m1 and m2 under a key k, i.e.
# c1=enc(k,m1)
# c2=enc(k,m2)
there is an operation Add, which anyone can perform, which produces a ciphertext c3 which is the encryption of m1+m2; and an operation Multiply, again which anyone can perform, which produces a ciphertext c4 which is the encryption of m1*m2,
#c3=Add(c1,c2) = enc(k,m1+m2)
#c4=Multiply(c1,c2) = enc(k,m1*m2)
The important point is that to apply Add and Multiply we do not need knowledge of the key k.
Aside from his homomorphic encryption activities professor Smart is also Editor in Cheek of the Journal of Craptology, to which he has also contributed his own articles, such as ‘A treatise on the application of Zero Knowledge Proofs’ (Journal of Craptology, Volume 2, July 2006.)