The word tzimtzum means contraction, withdrawal, narrowing. It is the first act of the story of creation according to the Ari, and it answers a simple difficulty: if the light of Ein Sof fills everything, where could anything other than it fit? Etz Chaim answers: when it arose in His simple will to create the worlds, Ein Sof "contracted Himself" at the central point of His light. He drew that light away to the sides, all around the point, and there remained a free place, an air, an empty space.
The text insists on the shape of this space: it is round, equal on every side. Why? Because the light of Ein Sof is perfectly equal; it could not withdraw more on one side than on another, and the circle is the most equal of shapes. The text also gives a second reason: emanated beings shaped as a square or a triangle would have corners closer to Ein Sof than the rest, and would not receive His light equally. One can read in this detail, which looks geometric, an idea: at the starting point, everything is at equal distance from the light. Above and below will come later, with the line.
Two warnings. First, do not understand tzimtzum physically: the Tanya (Shaar HaYichud vehaEmunah, chapter 7) explains that the light did not disappear, it ceased to be revealed. Ein Sof occupies no space; "place" and "sides" are images to say that He veils His presence so that a limited being can exist without being annulled by the Infinite. Second, the withdrawal is not an abandonment. The empty space remains surrounded by Ein Sof on every side, and you will see in the next entry that a thread of light enters it at once.
A note in Etz Chaim adds a key: tzimtzum serves "to reveal the root of the severities," in order to give afterwards the measure of judgment to the worlds. In other words, the very possibility of a limit, of a no, of a boundary, is born here. Without limit, no form; without form, no creature; without creature, no one to receive the good that G-d wants to give. Shaar HaKlalim says it in its first line: G-d created the world "in order to do good to His creatures," so that they may recognize His greatness and merit to cleave to Him.
So keep the paradox: the Creator's first gesture is not an expansion but a withdrawal. Making room for the other is the beginning of everything. Chassidut illustrates tzimtzum with the image of the teacher who veils the full extent of his knowledge so that the student can receive: at his own scale, he imitates this first withdrawal.
