Iteration is going through different versions of the project (e.g. first draft, second draft, first publish). Not only games does this, as other disciplines do it as well, like film students do test screening.
Refactoring is basically starting over with a part of a project.
Brief 1 is laying the foundation, or getting a good idea of what the foundation of the group's microgames idea is.
Brief 2 is content creation, or building upon the foundation of the microgame idea that was done in brief 1.