If you're educated, you've been to school or college, or otherwise been instructed or trained. Using long, fancy words will either make people think you're educated or that you're a show-off.
When you make an educated decision about something, you've learned about the subject before making up your mind — you've been educated or educated yourself, and you understand it completely. An educated conversation or debate about a topic is one in which both sides have knowledge about the issues. Educated comes from educate, with its Latin root, educare, which means both "educate" and "bring up or rear children."