It refers to the two major political parties in the US. A red state would be a mostly Republican state, while a blue state would be a mostly Democratic state.
When we talk about "red" and "blue" states, what we are referring to is the political affiliation of the majority of the population of a state. "Red" states are those where the population predominantly supports the Republican party. These states tend to be more rural, more conservative and more traditional. On the other hand, "blue" states are those in which the population is predominantly supportive of the Democratic Party. This is more common in states with high immigration and large urban areas, such as New York and California.
