A wiki is an easy to create website that allows multiple users to edit the page’s contents. Imagine a Microsoft Word document on the web, where you can easily link the content within documents to each other, and track changes from all authors and editors. Wikis have enormous potential as platforms for compiling and sharing knowledge.
Wikis are used as public encyclopedias, like Wikipedia, which millions of users have contributed to over 18 million articles, becoming the largest and most popular general reference work on the Internet.
Wikis can also be established on corporate intranets/extranets (Enterprise 2.0/Social Business tools) for employees to collectively author a document or series of documents networked together.
Google Docs is a great wiki-like tool for personal use and sharing with small groups.
Common Craft has a great video to demonstrate Wikis in Plain English.
For further reading, check out these great books: