A scenario is a specific possibility. To plan on playing with a bunch of bear cubs is a scenario — a dumb one, but still a scenario.
When people are wondering what to do, they think of different scenarios. Moving to a big city is one scenario — moving to a tiny town is another. A football team has to plan for many scenarios, like the starting quarterback being injured. The government plans for hundreds of scenarios, such as natural disasters and attacks by terrorists. In literature, a scenario can mean a summing up of what's going on — what the situation is. A scenario is pretty similar to a situation, but a scenario hasn't happened yet and might not happen at all.