What does it say?

This is the fourth teaching portion that Matthew records in his Gospel. This particular teaching concerns relationships. In response to conflict about relative positions of power among his disciples, Jesus speaks to them about the need to be child-like in the innocence of their attitudes (18:1-14). Luke records similar teaching about offenses and also the parable of the lost sheep, though the context and application is different.
Jesus deals in some detail about the process to deal with conflict among believers and the power of unconditional forgiveness (18:15-22). He follows this teaching with a parable of servant that was forgiven and yet was not willing to forgive others (18:23-35).

What does it mean?

Jesus will not give room for political infighting among his disciples. He has no desire for them to vie for position and prominence like the scribes and Pharisees. By placing a child in a position of prominence, Jesus is turning conventional wisdom on its head. We tend to think that children are not mature enough to make intelligent decisions about God and spiritual matters. We want them to have an adult-like experience. Jesus is saying that adults need to have a child-like faith and experience when it comes to things spiritual and eternal.
Few biblical themes are more practical and powerful than that of forgiveness. The Bible is a very realistic book and recognizes that relationships are fragile. The bulk of this chapter is given to Jesus teaching on forgiveness and reconciliation. The focus is on keeping matters between the interested parties and escalating the issue only when one or more of the individuals involved fails to respond. The objective is always reconciliation, never retribution or revenge. And, as the final parable indicates, we should be willing to forgive others just as quickly and completely as God has forgiven us.

How will I respond?

Where do I stand with regard to forgiveness? Have I personally and finally received forgiveness from sin by placing my faith in the finished work of Jesus Christ? Is there someone that I need to forgive unilaterally and unconditionally?