The Celestial Equator is the extension of Earth's equator out into space. A planet's position north or south of this plane measures its Declination.
Earth's equator is midway between Earth's North and South Poles. If we imagine this line extended out into space, that is the celestial equator.
Just as Earth's latitude measures how far an Earthly location is north or south of the Earth's equator, declination measures where a planet is, north or south of the celestial equator. When a planet crosses the celestial equator, it is at 0° declination.
Note: Earth's geographic equator and latitude are completely different from Celestial Latitude.