Politics is the study of decision-making power (who's got it, and who hasn't). Politics can take many forms -- discussions, arguments, etc.
Politics within the Middle Ages and the Renaissance largely revolved around who had the largest sharp sword, or who had the most friends with sharp swords. Politics also revolved around who was in power in the Church, who was wearing the Crown, and who had the favour of those in power in those institutions. The resolution of political disputes was made primarily by wars rather than diplomacy, however the influence of the pope and the institutions surrounding the papacy meant that the Church was also heavily involved in the resolution of political disputes.
Politics in the SCA usually revolves around the officers and peers of the SCA, not to mention the Crown. Fortunately, in the case of the latter, we have a system that is very similar to the system in place in the Middle Ages in that the strongest person with the largest (in our case blunt) sword is the winner.