A 12-point font is larger than a 10-point font?

Points are an old unit of measurements. They are the smallest measurement in the typographic system of measure. On a modern system, a point is 1/72nd of an inch (or around 0.357 mm.)

On the screen, this gets a little murky. Inches are hard to translate to the resolution of a computer screen, and so points are kept mainly in an effort to make people used to the measurement system comfortable.

Originally, a font-size was measured from the top to the bottom of the metal backing on the printer's letter. Now, fonts are normally measured from the top of their ascenders (like the top of a "k") to the bottom of the descenders (like the bottom of a "j".) A 12pt. font is a font that can be measured at 12pts, or a little less than 3/16ths of an inch.