Why does stellar parallax occur?

Try the following experiment:
Hold up your thumb at arm's length. Now, look past your thumb to whatever is in the distance. Open one eye, then the other. See how your thumb seems to jump back and forth? That's parallax - the changing position of a foreground object compared to a background object as the observer's position changes.
As the Earth orbits around the sun, it's position changes, so that a nearby star will shift very slightly compared to distant background stars.
To give an idea of how much (or how little) the foreground star moves, the parallax motion gives us the measurement of a parsec (a Parallax-arcsecond). The parsec is defined as the distance away from Earth an object would be if it's parallax motion is 1 second of arc (#1/3600# of a degree), when the Earth moves 1 AU (the distance from Earth to the sun). A parsec is equal to 3.26 light years.
So a star 10 parsecs (32.6 light years) would be seen to move only 0.1 arcseconds (#1/36000# of a degree) against the background between, say January and May.
For comparison, the moon is about #1/2# a degree wide as viewed from Earth.