A password is a collection of characters that is used, usually in conjunction with a username, as a means of authentication.
Passwords have been used in computing since as early as 1961, on MIT's Compatible Time-Sharing System - one of the first multi-user machines. They are generally used in combination with a username to authenticate a user's access to various resources that are not public. For added security, passwords are sometimes used with various hardware tokens instead of a username, or are completely replaced with something like an RSA keypair.