Nominators secure the Relay Chain by selecting good validators and staking DOT.
You may have an account with DOT and want to earn fresh DOT. You could do so as validator, which requires a node running 24/7. If you do not have such node or do not want to bother, you can still earn DOT by nominating another validator.
By doing so, you become a nominator for the validator(s) of your choice. Pick your validators carefully - if they do not behave properly, they will get slashed and you will lose DOT as well.
While your DOT are staked by nominating a validator, they are 'locked' (bonded). You can receive new DOT in your account but you cannot stake as validator or transfer DOT away from your account. You can un-nominate at any time to stop staking your funds. Keep in mind that the un-nomination is effective in the next era, and that un-nominating does not automatically unbond your funds. There is an unbonding period of 7 days on Kusama and 28 days on Polkadot before bonded funds can be transferred.
Active vs. Inactive Nomination
When you go to the Account actions under staking page, you should see your bonded accounts and nomination status. If not, you can follow this guide to configure it first. Your nominations will be effective in the next era, that means roughly 6 hours on Kusama and 24 hours on Polkadot.
Suppose you have nominated five validator candidates, and three out of five were elected to the active validator set, then you should see two of your nominations as "waiting", and most likely one as "active" and the rest as "inactive". Active or inactive nomination means your nominated validators have been elected to be in the validator set, whereas waiting means they did not get elected. Generally, you will only have a single validator have an active nomination, which means that you are directly supporting it with your stake this era and thus potentially receiving staking rewards. Every era, a new election will take place and you may have be assigned a different active nomination from among the validators you have selected.
If you are committing a very large amount of stake, then you may have more than one active nomination. However, the election algorithm attempts to minimize this situation, and it should not occur often. See the section on Phragmén optimization for more details.
Validators can only pay out to 64 nominators per era. If more than 64 nominators nominate the same validator, it is "oversubscribed", and only the top 64 staked nominators (ranked by amount of stake) are paid rewards. Other nominators will receive no rewards for that era, although their stake will still be used to calculate entry into the active validator set.
Although it is difficult to determine exactly how many nominators will nominate a given validator in the next era, one can estimate based on the current number of nominators. A nominator with only 5 nominators in this era, for instance, is unlikely to have more than 64 in the next era. An already-oversubscribed validator with 100 nominators this era, however, is much more likely to be oversubscribed in the next era as well.
Possible effect of inactive nominations on rewards
As long as you have nominated more than one validator candidate and at least one of them got elected, your bonded stake will be fully distributed to one or more validators. That being said, you still will have the chance to get 0 rewards if you nominated very few validator candidates and no one got elected, or your stake is small and you only selected oversubscribed validators. It is generally wise to choose as many trustworthy validators as you can (up to 16) to reduce the risk of none of your nominated validators being elected.
What to take into consideration during nominating
As a nominator, if you only want to know the profit each validator made for each era, you can go to the Targets section under the staking page by inputting the number of tokens you would like to stake to check it. Then, nominate those who have a higher profit. However, that does not guarantee the right way to evaluate the validators' overall performance.
One example would be if a validator is regularly offline, their nominators most likely would get fewer rewards than others. More importantly, when many validators are unreachable, those nominators who staked with them will be slashed.
Thus, to be a smart nominator, it would be better to query their histories to see statistics such as blocks produced, rewards and slashes, and identity (if they have it set). Moreover, a nominator should do comprehensive research on their validator candidates - they should go over the validators' websites to see who they are, what kind of infrastructure setup they are using, reputation, the vision behind the validator, and more.
These concepts have been further explained in the Why Nominate on Polkadot & Kusama video and What to Consider when Nominating Validators on Polkadot and Kusama and Nominating/Staking on Polkadot and Kusama