Alvin Plantinga, answered from the texts and cited to the page.
The core idea is this: some persons may be such that, no matter which possible world God actualizes in which they exist and are significantly free, they will go wrong with respect to at least one morally significant action. I call this condition transworld depravity. The formal definition runs as follows. A person P suffers from transworld depravity if and only if for every world W such that P is significantly free in W and does only what is right in W, there is an action A and a maximal world segment S' such that S' includes A's being morally significant for P, S' includes P's being free with respect to A, S' is included in W and includes neither P's performing A nor P's refraining from A, and — crucially — if S' were actual, P would go wrong with respect to A.1
That last condition holds in the actual world, not in W itself; that is what gives the definition its bite.2 The intuitive picture is this. God knows, prior to any creative decision, what any free creature would do under any circumstances in which God might place it. Take Curley — my canonical illustration. God can create Curley in various circumstances and leave him free with respect to some action A.
But perhaps for every such circumstance, what God knows in advance is that Curley will take at least one wrong action. No matter what situation God places Curley in, so long as Curley remains significantly free, he goes wrong somewhere.3 God cannot simply make Curley go right, because that would remove Curley's freedom with respect to the action in question — and then the world actualized would not be the one God was aiming at.4
What makes the concept philosophically load-bearing for the Free Will Defense is the possibility claim. It is clearly possible that every creaturely essence suffers from transworld depravity.5 If that possibility were actual, then God — though omnipotent — could not have created a world containing moral good but no moral evil. To create a world with moral good, God must create significantly free persons.
But every significantly free person, under this scenario, will go wrong somewhere. The price for moral good is moral evil, and not even omnipotence can escape that conditional, because the counterfactuals of freedom are not within God's control to alter by fiat.6 The formal upshot for the Free Will Defense: the proposition that it was not within God's power to create a world containing moral good but no moral evil is possible and is consistent with God's omnipotence and omniscience.
That possibility, together with the proposition that God created a world containing moral good, jointly entail that there is evil — and the conjunction of all three is consistent with God's being omnipotent, omniscient, and wholly good.7 The logical incompatibility argument against theism therefore fails.
A person P suffers from transworld depravity if and only if the following holds: for every world W such that P is significantly free in W and P does only what is right in W, there is an action A and a maximal world segment S' such that (1) S' includes A's being morally significant for P (2) S' includes P's being free with respect to A (3) S' is included in W and includes neither P's performing A nor P's refraining from performing A and (4) If S' were actual, P would go wrong with respect to A.God, Freedom, and Evil, pp. 56–57
Notice that this third condition holds in fact, in the actual world; it does not hold in that world W'.The Analytic Theist, pp. 75–76
Perhaps what God knows is that if he creates Curley, causes him to be free with respect to A, and brings it about that S is actual, then Curley will go wrong with respect to A. But perhaps the same is true for any other state of affairs in which God might create Curley and give him significant freedom; that is, perhaps what God knows in advance is that no matter what circumstances he places Curley in, so long as he leaves him significantly free, he will take at least one wrong action.The Nature of Necessity, pp. 199–201
On the other hand, if God causes Curley to go right with respect to A or brings it about that he does so, then Curley isn't free with respect to A; and so once more it isn't W' that is actual.The Analytic Theist, pp. 75–76
it is possible that every creaturely essence—every essence including the property of being created by God—suffers from transworld depravity.God, Freedom, and Evil, pp. 61–62
the price for creating a world in which they produce moral good is creating one in which they also produce moral evil.God, Freedom, and Evil, pp. 56–57
These propositions are evidently consistent—i.e., their conjunction is a possible proposition. But taken together they entail (3) There is evil.God, Freedom, and Evil, pp. 61–62