An internship is an opportunity offered by an employer to potential employees, called interns, to work at a firm for a fixed period of time. Interns are usually undergraduates or students, and most internships last between a month and three months. Internships are usually part-time if offered during a university semester and full-time if offered during the vacation periods.
An internship should give you practical skills, workplace experience and greater knowledge of that industry, in exchange for the employer benefiting from your labour.
An internship can be either paid or voluntary. The trend is increasingly (and rightly) towards the former, as voluntary internships are often cited as exploitative. As you would expect, internships that pay well are usually the most competitive.