Android's latest iteration is Jelly Bean (version 4.2), but your phone is still rocking a very stale Ice Cream Sandwich (4.0) or maybe even Gingerbread (2.3). In other words, you're missing out on such key features as the Google Now voice assistant, detailed notifications and support for all of today's modern apps. You can pray that some day your carrier or manufacturer will take pity on you and deliver an over-the-air OS update or you can take matters into your own hands by rooting your device and installing a custom ROM.
Rooting one's Android device is not for the faint of heart. The process involves a series of complicated steps which, if followed incorrectly, could turn your phone or tablet into a brick that won't be covered under your warranty. However, if you're willing to take the risk, you can find rooting instructions for your specific device at sites like the unlockr or xda developers forums. With a rooted phone, you can not only update the operating system, but also run apps that provide otherwise unavailable capabilities such as video screen capture or overclocking.