The Zone System was first introduced by Dan Harrington in his highly acclaimed book Harrington on Hold'em, Volume II: The Endgame. The system divides a poker tournament into five different zones based on a player's stack size as compared to the blinds and antes. Each zone will affect your play and correct strategy will vary dramatically as a result. The ratio of your stack compared to the blinds and antes is referred to as your "M." For example: You have $750 in chips and the blinds are $25/$50 with no antes. This means that you have 10 times more than the starting pot and your M is 10.
The Green Zone: M is 20 or More
In the Green Zone all weapons are at your disposal and you can play in all different kinds of playing styles. This is the place to be but you must be careful to balance your play in a way that allows you to continue building your stack while simultaneously protecting it. You can afford to play in both a super conservative style as well as in a super aggressive style.
The Yellow Zone: M is 10-20
You can no longer play conservative (tight) poker. The blinds and antes are starting to hurt your stack and you must loosen up your play and take more risks. Certain types of hands become less playable, such as small pairs and small suited connectors. This is because these hands now lack the implied odds necessary to turn a profit: The stacks have to be big in order to achieve this.
The Orange Zone: M is 6-10
You have now lost the ability to make more advanced moves. For example, you can't come over the top against a raise and a re-raise because, even if you make an all-in raise, your bet will not be big enough to discourage a call from even the weakest of hands.
Your main concern is to be first in whenever you decide to play (unless you have a monster hand like AA-QQ and A-K). You must try to preserve your chips for an all-in move, such as an all-in re-raise when you are in the big blind and suspect a steal. This means that you should not make marginal calls in the big blind or small blind, or limp in with drawing hands the way you could when you were in the Green or Yellow zone.
The Red Zone: M is 1-5
Your only move is basically to move all-in. Even if you make the minimum raise you are pot committed and can't get away from the hand. If your M is 3 or less then you will most likely be called by any two cards when you make your all-in raise. Small pairs and small suited connectors are again playable but only as a means to making an all-in move. You need to steal as many blinds and antes as possible and hope to get lucky if you are called (most likely you will be the underdog) or pick up a monster hand and hopefully get called.
If you are first in and sitting in a late position you can move all-in with plenty of hands; AA-22, any two cards 10 or bigger, A-x, K-x, Q-x, any suited connector, and any connector if your M is 3 or less (such as 9-8 off-suit and the like).
The Dead Zone: M is less than 1
As implied by the heading, you are as good as out of the tournament and every move you make will be instantly called. You need a lot of luck to get back into the tournament. The most important thing to consider is your play before you enter the Dead Zone. If you have blinded yourself down to this position then you have made a mistake. You should only end up in the Dead Zone by losing a big pot when your stack was bigger than it is now and your opponent had slightly less chips than you had.
You should make your move when you are first in and before the big blind arrives (this means moving in with any two cards when a first-in opportunity arises). This way you at least have some chance of getting the pot heads-up against a random hand.