What is the "simple frequency ratio" theory of consonance and dissonance? Why is it called a theory?
The "simple frequency ratio" theory basically claims that an interval is consonant if it can be expressed as the ratio of "simple" integers (as opposed to "complex" fractions).
This thought process has existed for centuries. One example was by Zarlino, a sixteenth-century theorist whose notion of the senario suggested that the only consonances were those created by ratios of the numbers 1 through 6. (For an earlier numerically based system, check out Pythagoras and the notion of the "tetraktys of the decad.")
Since Zarlino was publishing right around the onset of the scientific revolution, his senario was challenged almost immediately by theorists seeking physical/natural explanations. The "simple frequency ratio" theory is still problematic today.
As for why it's a theory, note that that word is being used in the sense of a scientific theory, not in the vernacular sense of theory that tends to mean "guess." It's a theory just like gravity, evolution, and germ theory: it's something that is falsifiable and can make testable predictions.