neighbors are all the provinces that share a border with the province you are looking at.
These are divided into two categories, neighbors and enemy neighbors, but the math is the same.
If the neighboring provinces have a higher morale they will have a positive influence
If the neighboring provinces have a lower morale, they will have a negative influence.
The same rules apply with enemy provinces that border the province you are looking at.
This allows morale to "flow" from strong areas such as your core with a capital and lots of infrastructure and possibly forts to areas that have been recently conquered and have lower morale.
Once you understand this "flow" the rest of the game is easy 
