Canon refers the characteristics of a particular book, movie, TV show, etc. that make up a fandom, as opposed to fanon. Canon can also mean the works themselves. For example, the Harry Potter canon, which is one of the simpler examples, is the seven novels and two shorter books by JK Rowling. Harry, Ron, Hermione, Snape, and the other characters in the books are called canon characters or sometimes just "canons."
The issue of what is and isn't canon is sometimes quite complicated. For example, different books can contradict themselves. There are also works that are questionably canon, like interviews with authors. Movies that are based on books can also be a problem, because a lot of movieverse fanfiction may be written, and people have to decide if the movies make up their own canon.