Technically, content is every piece of text and media that is distributed/displayed via your site, whether that be in the component, module, mambot/plugin, or template. In Joomla, when someone says content, they are probably referring to the core content component and the content items that are entered into that component and displayed on your site.
But this isn't that simple... because Joomla is evolving, and each major version has his own "content" concept. Originally, in Joomla 1.0 there where at least two kinds of such content items you can use.
The other type of the content is what make Joomla so capable and multifaceted from the start, the "classic" Joomla content item. These content items are having at least 2 distinctive new properties used fully by a clever webmaster:
1they're organized in structured manner, in Sections, divided in Categories for Joomla 1.0 and Joomla 1.5, giving you the opportunity to organize your content in a 2 level deep system, and since the Joomla 1.7 in nested/chained category levels of any deepness, giving you even more options. This means you can create a hierarchy of categories. Each category can have one parent category, but one category may have unlimited child categories.
2they're internally divided in 2 main parts: the so called Intro Text - which is required, and the less used, optional Main Text in the Joomla 1.0, and the more enhanced concept of single content item, which optionally can be divided in the now classic Introtext/Main text pair by inserting the ReadMore delimiter.
The Joomla framework have built in a lot of possibilities to play with these properties, and to show your content in various ways, as you need them.