Something that's OK is acceptable or allowable — it's fine. If you ask your little brother how the scary rollercoaster ride was and he answers, "It was OK," it didn't quite live up to his expectations.
Use OK or its variant, okay, to mean "all right," or to express your approval. If your sister asks whether she can use your roller skates and you answer, "OK," you've authorized her to borrow them. Word experts have different theories for the origin of this word, the most common one being a 19th-century Boston fad of abbreviating misspellings, which led to OK as a shortened form of "oll korrect," or "all correct."