Globalization is the growing interconnection and interdependence of people in the various countries of the world. The world has been getting more and more globalized for hundreds of years. Lately, the pace of globalization has sped up with technologies such as the internet and highly efficient containerized shipping.
Just wanted to add a note re the changes in a pre-existing business. When a business that already exists in a small market, one limited to a single country or area, both in its supply sources and in its markets, makes the decision to expand to other nations, etc., it is called "globalization"--the executive decision to expand beyond its present limitations. For example, if an already existing small company selling skis to Colorado and Utah redidents decides to advertise and market in Europe because of global weather changes, the company would undergo all the problems and advantages that "globalization" entailed--new competition, new market profiles, new transportation problems, etc. Technically, a new company that always assumed world-wide marketing would not be considered going through "globalization." In other words, globalization is a business decision, not a pre-existing condition.
Globalization is usually used to describe the flow of labor, people, capital, ideas, products, and technology between different parts of the world. As the previous post observes, this has been happening for centuries, but the rise of information technology, rapid travel, and other developments have sped up the process and made it more pervasive. Globalization also involves the rise of multinational corporations and international organizations that exert an influence around the world.
Simply, globalization is the ability for people to interact over long distances. These interactions can be completed because of personal relationships, business relationships, and political relationships. Essentially, globalization allows people to ignore the barriers which exist because of the physical nature of the world (oceans, mountains, and general long distances).