Entropy Explained

Let us say that a body has a certain amount of thermal energy (heat) at temperature T1. If we take some thermal energy from that body, and put it through an engine and have a low temperature sink, it will produce some mechanical energy (work).
On the other hand, let us say that we took that same quantity of thermal energy from the body at temperature T1 and allowed it to transfer it to another body at a lower temperature T2 without producing any mechanical energy (work).
Now, if we take that thermal energy from the second body at temperature T2 and put it through an engine and have the same low temperature sink, it will produce less work than in the first case. (We explained elsewhere that higher the source temperature, greater will be the work produced.)
What happened is that when some thermal energy moved from the body at temperature T1 to the body at temperature T2 (where T2 lower than T1), we lost some capability to produce mechanical energy (work). Or in other words, we degraded the quality of energy.
They had invented the property called Entropy to explain this degradation of the quality of energy.
We would say that the first body has Entropy S1 (along with its temperature T1) and that Entropy is decreased when a certain amount of thermal energy moved away from it. The second body has entropy S2 (along with its temperature T2) and that Entropy has increased when it received the thermal energy from the first body. The increase of Entropy of the second body is greater than the decreased value of entropy in the first body.
But, in the universe, which has the first body and the second body, one has decreased its entropy and the other has increased its entropy for the same amount of heat that transferred from the first body to the second body. The increase is greater than the decrease. Hence, in the universe, the Entropy has increased.
So, we conclude that while we have not lost any energy in the universe, its quality has decreased. Such increase can be measured (observed or indicated) by the increase in the Entropy of the universe.
Thus, Entropy is a good measure to indicate the degradation of the quality of energy.
Combustion, friction, and heat transfer degrade the quality of energy and there will be increase in Entropy (of the universe).
The property, called Entropy, can thus be used to measure if a system that we are designing or operating is keeping up the quality of energy or degrading it.
Please note that it is different from wasting energy.

An observation:
Bring boiling water and frozen butter together (without actually mixing them) and you will find that the boiling water would give some of its heat to melt the frozen butter. The entropy of the universe increases. The entropy of the boiling water decreases and the entropy of the butter increases (more than the amount of decrease of entropy of the boiling water.)

Analogy:
Let us say, we have a heart surgeon and a first aid worker. The heart surgeon can do heart surgery as well as provide first aid. The first aid worker can provide first aid but cannot perform heart surgery. Now, if a first aid case comes up, it is best to assign that task to the first aid worker and not to the heart surgeon. If we use the heart surgeon for first aid work, we are degrading her capabilities. We could say that we are increasing the Entropy of the system. Again, please note the difference between wasting one’s time versus degrading one’s capabilities.

In popular conversation, we say that the Entropy has gone up when we do something to degrade the quality of someone’s capabilities.