Iteration means repeatedly applying the same rule. In $x_{n+1}=2+\frac{6}{x_n^2}$, $x_n$ is the current value and $x_{n+1}$ is the next value.

A subscript is not a power, so $x_3$ means the term with subscript $3$, not $x^3$. The first given value is called the starting value, usually $x_0$ or $P_0$.

Each use of the rule moves one step along the sequence: $x_0\to x_1\to x_2\to x_3$. Always substitute the latest value back into the formula.