Counterspell

Here’s how Counterspell actually works

“I cast Fireball.”
“I Counterspell.”
“I Counterspell his Counterspell.”
Yeah. Counterspell can get a little confusing.
Arguably the most powerful reaction spell in D&D 5e, Counterspell can be used to thwart the BBEG’s big plans, save a friend from certain death, and, ironically, can also be used to stop the spell that’s attempting to stop all that from happening.
First things first; let’s take a look at the official wording from the Player’s Handbook:
You attempt to interrupt a creature in the process of Casting a Spell. If the creature is Casting a Spell of 3rd Level or lower, its spell fails and has no Effect. If it is Casting a Spell of 4th Level or higher, make an ability check using your Spellcasting Ability. The DC equals 10 + the spell’s level. On a success, the creature’s spell fails and has no Effect.

At Higher Levels: When you cast this spell using a spell slot of 4th Level or higher, the interrupted spell has no Effect if its level is less than or equal to the level of the spell slot you used.
The Casting Time is 1 reaction, which is made “when you see a creature within 60 feet of you casting a spell.”
The tricky part about Counterspell is that, well, it’s a spell itself, right? Which means that it is just a susceptible to being Counterspelled as any other spell.
This, naturally, has raised some question within the D&D 5e community, especially with regards to both sides of a battle trying to cancel out each others cancellations of Counterspells.
Here’s what Wizards of the Coast has said about Counterspell in their Sage Advice Compendium — a constantly updating document that clarifies rules:
Sorcerers can avoid being Counterspelled by using Subtle Spell “Subtle Spell protects a spell without material components from Counterspell, since you can’t see the casting.”
I would argue that the caster has to specify that they are using Subtle Spell before someone decides to try to Counterspell them, however.

You can cast Counterspell to protect the spell your casting

It may seem like it goes against the Rules as Written that a caster can’t two leveled spells on the same turn, but that is specifically for the use of an Action and a Bonus Action — not a Reaction. This allows a caster to use their own Reaction (if they have it — remember that you only get one per round) to Counterspell a Counterspell that is trying to stop the original spell that they’re casting on their Action or Bonus Action.

A readied Dispel Magic doesn’t quite work like a Counterspell

“With the Ready action, Dispel Magic can be cast in response to another spell being cast, yet dispel magic can’t substitute for counterspell. The main reason is that dispel magic removes a spell that is already on a target, whether that target is a creature, an object, or some other phenomenon. Dispel magic can’t pre-dispel something. If a spell isn’t already present on a target, dispel magic does nothing to that target. The best that a readied dispel magic can do is dispel a spell immediately after it’s been cast to prevent it from having any effect after the action used to cast it. For example, on your turn you could say something like this: “I ready Dispel Magic, and if the high priest casts a spell on anyone, I cast dispel magic on the target if the spell takes hold.” If the high priest then cast hold person on your companion who fails the save against it, you could unleash your readied dispel magic and end hold person.”
This unfortunately won’t do anything about a Disintegrate or Power Word Kill being cast by that same High Priest, because the damage on those is instantaneous.

It’s up to the table (and the DM) for how lenient you want to be about meta spell knowledge

The thing about Counterspell’s upcasting is that you’d do it in response to a spell that you know is either being upcasted past third level or is already a higher level spell by default.
Some DMs will simply let their players know what level the spell is that they’re trying to counter, allowing them to burn through those higher level spell slots if they’ve got them. Other DMs may want an Arcana check to see if the PC can suss out the fact that the Fireball they’re trying to stop is actually being cast at a higher level or not.
Whatever way you decide to go with it, just make sure that it works the opposite way; so that the DM’s monsters also have to make that Arcana check if they want to know what level a player’s spell is that they’re trying to counter.

There’s no actual limit on the number of Counterspells that can be cast in a single turn

Imagine that you have 100 level 20 wizards fighting 100 level 20 sorcerers in some high magic shenanigans straight out of Wheel of Time’s Last Battle.
To start things off, the first wizard (Wizard #1) at the top of the initiative order casts Meteor Swarm targeted right at the center of the Sorcerers’ army. It will hit all of them, and likely kill them — squishy as they are.
Naturally, a sorcerer (Sorcerer #1) from the opposing side casts Counterspell with their 9th level spell. Problem solved, right? Well, not so much, because a wizard (#2) from the other side uses their 9th level spell slot to cast Counterspell on that Counterspell. So then Sorcerer #2 Counterspells that Counterspell, and so on and so forth until 201 spells have been cast within a single turn.

It does sound kind of silly, but I can’t find anything anywhere to refute that hypothetical.

The one big trump card here, as preciously mentioned, is the Sorcerer’s potential ability to use Subtle Spell. This protects spells from being Counterspelled, and can be done “when you cast a spell” — meaning that you can Subtle Spell a Counterspell so that it can’t be Counterspelled, given that the wording of Subtle Spell says nothing about “on your turn” or “as a bonus action.”
So yeah, Subtle Spell* is pretty damn powerful once you find yourself in Counterspell levels. Keep that in mind the next time your DM throws a few spellcasting NPC’s your way.

*Subtle Spell: When you Cast a Spell, you can spend 1 sorcery point to cast it without any somatic or verbal Components

Source:  April 16, 2021, D&D for Dummies, Posted by The Dispatcher
https://dnddispatch.com/counterspell-explained-dnd-5e-works/

Type

Metaphysical, Arcane