Wiki is like a collaborative website which can be directly edited by anyone with acess to it. It is simply an online database that could be used in communicating via a website which enables people to edit a page by using a simple markup language using a web browser. The most common of all being wikipedia - the free online encyclopedia. This is a great tool for working collaboratively where group or team members can write and edit stuff somultaniously. However, biggest disadvantage mainly with open-source wiki systems such as wikipedia it is easy for anyone to change information which could either be true or false.
There are a few websites which enable people to create there own wiki's such as : Wetpaint, pbwiki or wikispaces
Below is a video explaining what Wiki is and how it can be used in collaborative work.