The context window is the maximum amount of text, measured in tokens, that a model can consider at once, covering the instructions, the conversation, and any documents you provide.
Everything the model "knows" in a given call has to fit in its context window: your system prompt, the chat history, and any data you paste or retrieve. Go over the limit and the oldest content falls out.
Larger windows let you show more at once, but filling them is slower and costlier, which is why retrieval (showing only the relevant few passages) usually beats dumping everything in.
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