Encumbrance is the load you are carrying. Maximum encumbrance is a derived attribute that determines how much weight you can carry. The total weight of all the items in your inventory must always be less than your maximum encumbrance. Otherwise, you will become over-encumbered and will not be able to move. Grabbed items do not count against your encumbrance. Your maximum encumbrance (without any magic effects applied) is five times your Strength.
Total weight carried has no effect on your Speed, but total weight equipped (armor and weapon) can have a significant impact on it (and especially so if your equipped weapon is drawn). Your maximum encumbrance can be temporarily or constantly increased using a Feather or Fortify Strength spell or enchantment. Contrary to how it is reported in game, Feather actually decreases your current encumbrance rather than increasing your maximum encumbrance. This results in a limit on the total magnitude of active Feather effects equal to your encumbrance at the time the last Feather effect was applied. On the other hand, it also means that Feather effects allow you to run faster by decreasing the weight of your equipped armor and weapon, whereas Fortify Strength will not increase your speed.