Warning, contains Matrix spoilers
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In the first film of the Matrix trilogy, Thomas A. Anderson, a hacker of the alias "Neo" hears rumors of "The Matrix" and a mysterious man named "Morpheus". Neo spends his nights at the computer trying to discover the secret of The Matrix. Eventually he is introduced to Morpheus by another hacker called "Trinity".
Morpheus alludes to the fact that the reality that Neo is accustomed to is a lie and that Morpheus can show him the truth. He is asked to make a choice between two pills, red and blue. The blue pill will cause him to "wake up in [his] bed and believe whatever [he wants] to believe." He is told that if he takes the red pill, however, he will "stay in Wonderland" and Morpheus will "show [him] how deep the rabbit hole goes".
Neo chooses the red pill and is illuminated as to the true nature of the Matrix; a detailed simulation of Earth circa 1999, which keeps the inhabitants, whose physical bodies are stored in massive power plants, complacent in a mental prison, in order to convert their heat and bioelectrical energy into power for machine consumption.
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The terms were popularized in science fiction culture via the 1999 film The Matrix. In the movie, the main character Neo is offered the choice between a red pill and a blue pill, with the red pill leading to his "escape" from the Matrix, a fictional computer-generated world, while the blue pill would allow him to remain in the world with no knowledge that anything is wrong.
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