As a casual guitar strummer, you probably know some open chords.
(These are sometimes known as "cowboy chords", because anyone sitting round a campfire can handle them.)
CAGED is about two things: seeing those chords as shapes for building other chords, and connecting those shapes together. For instance, we can round out our chord list with F and B:
But these aren't new chord shapes. F is an E shape moved up one fret, and B is an A shape moved up two frets. A barre replaces the open strings.
These shapes are more useful if you know where the root notes are. A C major chord contains the notes C, E, and G; C is the root. Our C shape contains two Cs, highlighted in red. Let's highlight the roots in all our CAGED shapes.
The cool part of CAGED is that these chords connect to their neighbours through the roots. C connects to A and D; A connects to C and G; and so on. Let's play a C major chord all over the fretboard using the CAGED shapes in order. (To make this easier I've left out some strings in some chords.) Connection points are highlighted.
Practice this by playing these exercises.