Inside and outside are positional words that tell us where something is compared to a space that has a boundary, like a box, a bowl, or a house. When an object is inside, it is contained within that space. When an object is outside, it is located away from or beyond that space, not contained by it.
Learning these words helps children describe the world around them clearly. If a toy is in a basket, it is inside the basket. If the toy is sitting on the floor next to the basket, it is outside the basket. These are some of the very first positional words kindergarten learners practice, along with pairs like above and below.