x is the number of direct-line, biological ancestors you have;
n is the generation back from you.
So, one generation back, x=2¹ or x=2, you have 2 ancestors, your biological parents. You may also have adopted parents, step-parents, etc, but for the purpose of DNA matches, we're concerned with biological ancestors you may have inherited DNA from. As a general rule, this formula shows the largest number of ancestors you could have.
At some point, you'll have pedigree collapse and this formula no longer applies, but it works well for the limited number of generations we examine in most of our family history work.…