The master page is a feature that enables you to define common structure and interface markup elements for your Web site, including headers, footers, style definitions, or navigation bars. The master page can be shared by any of the pages in your Web site, called the Content Page, and removes need to duplicate code for shared elements.
Definition: excerpt from: http://sharepointmasterpage.blogspot.com/
Master pages are a feature of ASP.NET 2.0. Becouse SharePoint is built on ASP.NET 2.0 it inherits this feature.
Using master pages, you can create a single page template and then use that template as the basis for multiple pages in an application, instead of having to build each new page from scratch.
Master pages, in order to render in the browser, actually require two separate parts, the master page itself and a content page. A master page defines the common layout and navigation, as well as the common default content, for all of the content pages that are attached to it. A content page is a unique page. When the page is rendered in the browser, the master page supplies the common content and the content page supplies the page-specific content.
First, you create a single master page to define both the look and feel and the standard behavior either for all of the pages in your site or for a specific group of those pages. Then you can create individual content pages that contain the unique content that you want to display on each individual page. The master page is merged with the content pages to produce a final, rendered page that combines the layout from the master page with the content from the content page.
You can read more about master pages in SharePoint, here.
What Questions should have this tag:
customization or creation of masterpages deployment of custom masterpages