Input/output, or I/O, refers to the interfaces that different functional units of a system use to communicate among each other, or to the signals sent through those interfaces. Inputs are the signals received by the unit, and outputs are the signals sent from it. The term can also be used as part of an action; to "do I/O" is to perform an input or output operation.
The most common use of the term is for computer I/O devices that are used by a person (or other system) to communicate with a computer. For instance, keyboards and mice are considered input devices and monitors and printers are considered output devices.
Notice however that all the previous devices have both input and output, but the perspective is from the computer. Mice and keyboards take physical movement as input and convert it into signals that a computer can understand, whereas printers and monitors take signals that a computer can output and convert them into representations that humans can see or read.
Strictly speaking, however, the combination of the CPU and main memory (i.e. memory that the CPU can read and write to directly, with individual instructions) is considered the heart of a computer, and any movement of information from or to that complex, for example to or from a disk drive, is also considered I/O.