First off, the tier the Pokemon falls into is based on usage, hence the names of the tiers.
If a Pokemon isn't used enough in a certain tier, it drop to the tier below it.
OU - OverUsed
These are the Pokemon most often seen in competitive.
Example Pokemon:
Rotom-Wash was one of the most used Pokemon this gen.
BL - BorderLine
These Pokemon are simply those who are more used than the standard for UU and less used to fall under the OU category.
(BL 2 and 3 and so on go by the same formula so I won't mention all of them. They are basically in between every tier.)
UU - UnderUsed
Pokemon in the UU tier are the ones that just don't have enough usage to fall under the OU category. Usually because of having lower stats or worse movepools.
Example Pokemon:
Umbreon
RU - RarelyUsed
Pokemon that are used less than ones in UU fall into RU/LU (LittleUsed).
Example Pokemon:
Drapion
NU - NeverUsed
These are the Pokemon that are used the least out of any others, and because of that fall under NU - the lowest tier based on usage.
Example Pokemon:
Mightyena
Next are 2 extra tiers that aren't based on usage.
NFE - Not Fully Evolved
This contains most Pokemon that aren't yet fully evolved and are in the second from last stage of evolution.
Example Pokemon:
Gabite
LC - Little Cup
In this tier, only the lowest forms of Pokemon of those who can evolve are allowed. They must be level 5 or lower to be allowed to compete.
Example Pokemon:
Mienfoo
Ubers
This is the tier of Pokemon banned from OU for just being too strong for the tier.
A lot of newer players think that legendary Pokemon automatically fall under this tier but that is not true, though there are quite a few.
Example Pokemon:
Source
Hope I helped!
