To circulate is to move continuously in a specific circuit, often in a circle. A ceiling fan circulates cool air around the room on a warm day.
Blood circulates through your body, pumped from your heart through veins and arteries — your circulatory system — and delivering oxygen to your tissues. This system is closed, meaning the blood stays in your body, bringing oxygenated blood back to your heart. People circulate when they move around a room at a party, chatting with different people, and rumors circulate when they're passed in a circle, from person to person. Circulate comes from the Latin circulare, "to form a circle."