Non-Fungible Token
A token whose units are individually distinct, so each one has its own identifier and cannot be swapped one-for-one.
A non-fungible token contract maps a unique identifier to an owner address, so the contract knows which specific item an address holds rather than only how much. Descriptive information such as a name and an image link usually sits outside the chain, referenced by a link the contract stores, which is why storage choice matters for durability. The form is used for collectibles and art, but also for anything with per-item state: domain names, event tickets, membership passes, and financial positions whose terms differ per holder. On Ethereum the common standards are ERC-721 for single items and ERC-1155 for mixed batches.
In practice
A Uniswap v3 liquidity position is represented as a non-fungible token because each position has its own price range and its own accrued fees.
The common misunderstanding
Buying a non-fungible token usually does not transfer copyright or the underlying file; the token records a pointer and an owner, while the artwork often sits on a separate server or storage network.