For example:
$$\lim_{x\to 1} \frac{x^4-1}{x-1}$$
We could expand and simplify like so:
$$\lim_{x\to 1} \frac{(x-1)(x^3 + x^2 + x + 1)}{x-1} = \lim_{x\to 1} (x^3 + x^2 + x + 1) = (1^3 + 1^2 + 1^1 + 1) = 4$$
In this case we divided out $x-1$ on top and bottom even though technically, at $x=1$, we have $\frac{0}{0}$ that we're just tossing aside.
But what allows us to do this?
Simply because we are dealing with values $x\neq 1$ in this case, thus for algebraic rule we are allowed to cancel out
$$\lim_{x\to 1} \frac{x^4-1}{x-1}=\lim_{x\to 1} \frac{\color{red}{(x-1)}(x^3 + x^2 + x + 1)}{\color{red}{x-1}}$$
Remember indeed that by the definition of limit we are demanding that $$\forall \varepsilon>0 \quad \exists \delta>0 \quad \text{such that}\quad \color{green}{\forall x\neq1}\quad|x-1|<\delta \implies|f(x)-L|<\varepsilon$$
Note also that the same cancellation is used to prove the basic derivatives case, for example for $f(x)=x^2$
$$\lim_{x\to x_0}\frac{x^2-x_0^2}{x-x_0}=\lim_{x\to x_0}\frac{\color{red}{(x-x_0)}(x+x_0)}{\color{red}{x-x_0}}=\lim_{x\to x_0}(x+x_0)=2x_0$$