What is a Master-key System?
The best and easiest way to explain master-keying is to think of a hotel. The owner has one key that fits everything - all the rooms, store-rooms, offices, etc. The office manager has a key that fits only the offices. The maids have a key that only fit the rooms. Then the guest have a key that fits only the room in which they are staying. 

If one of the guests leaves and takes their key, then a locksmith can come and invalidate that key and re-key the room to a new key. This will not, however, affect the other keys - unless the locksmith is poorly trained. Or if one of the house-keeping personnel leaves, the doors can be re-keyed to replace that key which will not affect the rest of the keys.