Smart contracts are inherent to blockchain technologies. They are like trained dogs, who do things when certain things they’ve been trained for, happen. For example, they sniff out drugs, or bark when there’s a stranger at the door…etc.
With smart contracts, if certain conditions are being met, these programs execute a certain action.
In the case of Circles, the smart contracts define for example how many Circles you get when you sign up and your daily UBI amount.
In short: smart contracts are programs on the blockchain.