A wiki is a website where anyone can change any page at any time. Think of it as a public chalkboard where everybody has a piece of chalk and an eraser.
At the top or bottom of every wiki page is an "Edit" link, which takes you to a page with a huge text edit box and a "Save" button. In that text edit box is the contents of the page you were just reading. You can then edit the text of that page, and click the "Save" button. You'll be returned to the page you were reading, which will reflect your changes.
Wikipedia
Practically speaking, wikis are perfect for online documentation sites and mini-encyclopedias. In fact, the most famous online dictionary, Wikipedia, is a wiki.
Wikipedia is a huge online encyclopedia covering a vast array of topics. And it's pretty accurate, too. And if it's not accurate, you can correct it.