A single-core microcontroller is multitasking when it executes several tasks that must share its single processor. The processor must interrupt each task to switch briefly to another, to keep all of the processes going.
Imagine a chef in a kitchen alone, making bread, roast beef, and sauce. The chef must knead the bread dough for 15 minutes, interrupt that task every minute to stir the sauce, and remove the roast from the oven as soon as a thermometer reaches 120 °F. At any moment, the chef (processor) is executing only one task, while keeping all three processes (kneading, stirring, roasting) going at once.
Now imagine being that chef. The more tasks you must do at once, the more difficult it gets to keep track of them all, and keeping the timing right becomes more of a challenge.