Where the name comes from, and why 4 levels are easier
LLight
photons
AAmplification
more of them
SStimulated
triggered
EEmission
sent out
RRadiation
as waves
Stimulated emission: a photon of just the right energy passes an excited atom and “persuades” it to give up its energy. The new photon is an exact copy of the first — same direction, phase, polarization and wavelength. Each copy can trigger more — hence the avalanche and the gain.
Population inversion: gain beats absorption only when there are more atoms in the upper laser level than in the lower one. That's why the laser has to be pumped — with a flash lamp, a diode or an electrical discharge.
3 levels (ruby): the lower laser level is the ground state, where all the atoms sit at the start. So you have to excite more than half of them before any gain appears. 4 levels (Nd:YAG, He-Ne): the lower laser level lies a little above the ground state and empties almost instantly — a handful of excited atoms is enough for inversion, so the threshold is many times lower.
Mirrors: one reflects almost 100%, the other e.g. 98% — it lets a fraction of the light out. A photon bounces back and forth many times and is amplified on every pass. If the output mirror lets too much through, the losses exceed the gain and the laser goes dark.