The theory was first written by Gilbert Harman, and then popularised by Descartes in his 'Evil Demon' thought experiment. In simple terms, it says that your brain could be somewhere else, manipulated by a super-computer that gives you sensory experiences. In other words, the reality you perceive isn't the real one, it is created by your brain, which isn't necessarily in your head.
Descartes' thought experiment says that we live in a simulation controlled by an evil demon who can easily determine what we perceive, and therefore make whatever it decides correct or incorrect.
'I am not right or wrong but thinking makes it so' ~ William Shakespear
What do you think the demon would make out of the Brain in a Vat theory? Of course he would prove it wrong! Otherwise he will be seen. Read a bit about it and almost all you will find is arguments proving it wrong.
But what if... you weren't really here? What if this *really* was a simulation?
Why is that so scary? The demon makes it so! And that same demon also makes sure we never look within, but focus on solving problems within the world (that doesn't really exist). All of the news we are exposed to, the dangers, the deaths, the competition - these things massively limit our perceptions of ourselves.
But awakening, enlightenment, salvation - all of these terms point to the same thing - that there is a reality much more beautiful than anything you can imagine, beyond this world, and beyond what you currently know.
'All I know is that I know nothing' ~Socrates
The demon manipulates reality so that we think we know what we are doing (if you are honest with yourself, you will see you haven't got a clue!), and makes not knowing the scariest thing. 'Darkness' is often associated to the unknown, and being 'in the dark' is perceived as uncomfortable and fearful.
I think knowing is scary! It traps the infinite into a tiny, tiny box.
I can already hear you ask: how do I know that I'm not manipulated by the demon? Here's how: there is a reality that just is, that can't be changed. The demon can only operate within the realms of experiences that the vat can create, not within the reality that created the vat.
The last realisation is that there's never been a vat nor a world.
If you have some time and want to experience an aspect of the Brain on a Vat theory, you can do the exercises from this webpage (takes about 20min):