The degree of cousins' relationship is determines by the number of generations to their closest common ancestor. If the cousins do not belong to the same generation (descended from the same ancestor), then they are "removed".
For instance, let's take the ancestries of William and Lord Frederick:
George V -> George VI -> Elizabeth II -> Prince Charles -> Prince William
George V -> Prince George, Duke of Kent -> Prince Michael of Kent -> Lord Frederick Windsor
We can see that:
- Elizabeth II and Prince Michael of Kent are first cousins (since their parents were brothers).
- Prince Charles and Lord Frederick Windsor are second cousins (since they are two-generation descendants of George V).
- Prince William and Lord Frederick's future child will be third cousins (since they are three-generation descendants of George V).
- Prince William's child and Lord Frederick's child will not, however, be in the same generation (William's child will be four-generation descendant of George V, while Frederick's child will be three-generation descendant), so they will be "removed" once, that is to say third cousins once removed.
Hope that answers your question.