Slippage
The difference between the price a trader expected and the price actually received when the trade completes.
Slippage comes from two sources: the market moving between submission and execution, and the trade being larger than the liquidity available at the quoted price. On-chain trades add a delay of at least one block, during which other transactions can change pool balances, so decentralized exchange interfaces ask the user to set a maximum tolerance and revert the transaction if it would be exceeded. Slippage is the realized gap against expectation; price impact is the portion of that gap caused by the trade's own size. A wide tolerance protects against a failed transaction but permits a worse fill, and it also widens the margin available to sandwich-style ordering strategies.
In practice
A swap submitted with a one percent tolerance will fail rather than execute if pool conditions change enough to make the received amount fall below that limit.
The common misunderstanding
Slippage tolerance is a limit, not a target; raising it never makes a trade cheaper, it only permits a worse execution.