A hiatal hernia occurs when a part of the upper stomach next to the esophagus, which carries food into the stomach from the throat, slips through the muscle of the diaphragm. These muscles help the valve between the esophagus and stomach keep acid and food in the stomach, but when part of the stomach is above the diaphragm, food and acid can more easily get into the esophagus.

A hiatal hernia by itself that's found incidentally during an x-ray examination of the stomach or esophagus doesn't need treatment if it's not associated with acid reflux or esophageal inflammation. However, in some cases, acid or food can get "stuck" in the hiatal hernia, causing much local irritation.

GERD is usually treated with acid-reducing drugs, elevation of the head of the bed, not eating near bedtime, and avoiding foods that promote GERD and heartburn like chocolate, alcohol, peppermint, fatty foods, caffeine, and spicy acidic foods. If these measures aren't successful, surgery is sometimes recommended. Typically, the stomach is folded around the esophagus to help keep stomach contents where they belong; this is called "fundoplication" and is almost always successful.

Here's a good piece from the National Digestive Diseases Information Clearinghouse:
Gastroesophageal Reflux Disease