The word “terms” as it relates to WordPress is one of those things that is rather simple but can be difficult to describe. The simplest way to explain “terms” is that it means just what you think it does – a word or phrase that describes something.
Specifically to WordPress, however, terms are the labels for things inside a specific category. For example, your website may have both tags and categories. The items inside these categories are the “terms.” The fancy way to say this is a taxonomy or attaching specific labels to categorized items.
What makes terms interesting in WordPress is that you can create custom terms both inside built-in WordPress taxonomies (like categories and tags) or completely new ones that you come up with. Terms are also used for things like widgets, plugins, themes, and shortcodes.
As all WordPress software is written in the PHP programming language, developers can write functions that search for or delimit information based on terms. Unless you plan on doing advanced modifications in WordPress or creating your own plugins and themes, you won’t have to ever worry about a precise definition of the word “terms.” Just know that it is a precise definition for items used in WordPress that exist inside different categories.