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What is a torsion balance, and how was it used to

demonstrate universal gravitation?

Look up the Cavendish experiment.

A torsion balance suspends a perfectly balanced rod with two

identical objects on the ends by a thin wire or quartz fiber. It
will eventually come to equilibrium. The system can be
calibrated by applying a known torque to the suspended rod
and measuring the rotational deflection of the wire or quartz
fiber. That yields the torsion constant of the wire or fiber.
In the Cavendish experiment (c 1798) the objects on the ends
of the rod were lead balls. When additional lead balls were
moved to a known distance on either side of those which were
part of the apparatus, the rod was deflected as the gravitational
forces between the secondary balls acted on those that were on
the balance. Since the apparatus had been calibrated by
relating a known torque to the amount of deflection, that is,
the torsion constant of the suspending wire had been
determined, measuring the deflection caused by gravity could
be used to calculate the torque - and hence the gravitational
force between the lead balls. Assuming Newton’s law of
gravitation (the inverse square law) was valid (already shown
to be consistent with the orbit of the Moon, the elliptical orbits
of the planets, etc.) the only unknown would be what was
called the Universal Gravitational Constant G, in that
equation. (Note: That formulation was not establish until after
Cavendish, so the determination of that constant did not occur
till later.)
So the Cavendish experiment showed that two non-magnetic,
non-electrical masses could attract one another, the force
could be measured, and by applying the gravitational force
law to that experiment, the constant G could be determined.
It led credence to the argument that gravity was a force
between any pair of masses - whether that pair is the Earth and
the Moon, the Sun and the planets, or two lead spheres in a
laboratory. That is, that the notion of gravity is a universal
concept - described by the same equation for all pairs of
masses.