Matchmaking is the process of bringing two or more people together, usually for the purpose of marriage, in which case the matchmaker is also known as a marriage broker. The word is also used in the context of sporting events such as boxing, in business, in online video games and in the pairing of organ donors. Matchmaking is the existing automated process in League of Legends that pairs a player with and against other players in games. Skill-based matchmaking refers to how a game decides which players to include in your lobby.
When you're looking for a partner in any video game, it uses a complex algorithm to find other players and fill your lobby; this is called matchmaking.