A "Server" is typically a single machine that has a specific OS and runs layers of various software that allows your business logic to be accessed by other computers (by your users). For a "Server" you typically have to choose an OS to run, install all the support software (server monitoring, etc), update the software, and if the server fails you have to fix it or rebuild it.

With "Serverless", your code is in a "function as a service" model where all you have to worry about is the business logic (your code). You don't have to set up the server, you don't have to install the server OS, or any basic server software that is needed to support the business logic code (http server, etc). You don't have to update the server or the underlying server software. You don't have to perform any maintenance to keep the server running smoothly. You never (typically) have to worry about your server going down. All you have to do is upload your business logic function "somewhere" and then your code runs when called. Essentially you do not have to deal with any of the hassle that comes with setting up and maintaining your own "server", all you have to do is write the code that is your business logic.

That's why it's called "Serverless" because you don't have to deal with any of the hassle that comes with running an actual "server".