The ability for a touch surface to respond to multiple finger touches at the same time.
For example, a common use for multi-touch is pinch-to-zoom, where you can place two fingers on a screen image (like photo, web page, or map) and spread your fingers to zoom in, or pinch your fingers together together to zoom out.
Another example is tapping (or dragging) with two or more fingers, and having that do something different than only using one finger.
Multi-touch is a common feature of capacitive touch screens, but not with older resistive touch screens.
See: Capacitive Touch