When a critical hit occurs the attack does more damage than normal. It disregards most stat changes (such as Attack reduction or Defense increases). Some stat increases are taken into account however. For example, if a Swords Dance user scores a critical hit, it will get the benefit of the Attack increase accounting for more damage. In Generation I however, Attack and Special boosts were disregarded and the damage from the critical hit could equate to less damage than if the Pokemon did not get the critical hit.
The chance of getting a critical hit with a regular move is 6.25%. Moves with a high critical hit level increase this chance to 12.5%, as does the Sniper ability. Held items may further these chances. These are: