What did Christ mean by the words "sheep" and "goat" in Matthew 25?

The Parable of the Sheep and the Goats is very strange indeed. Jesus arrives to judge humanity during his second coming, but he starts calling some people sheep and other people goats.

He says the sheep will be rewarded with eternal life, even though the sheep themselves don't remember doing anything to help him.

On the other hand, even though the goats never saw him before and thus could never do anything wrong to him, Jesus says they will receive eternal damnation.

What's going on here? Let's get to the bottom of this mystery!

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