What is meant by a Terry stop?
A Terry stop comes out of the landmark case of Terry v. Ohio. In Terry, the constitutionality of a frisk was challenged. The issue was can a police officer stop and frisk a suspect if he has less than probable cause and does this action constitute an arrest. The Terry court ruled that yes a LE officer can stop and frisk a suspect on reasonable suspicion alone without probable cause and this does not constitute an arrest. A suspects freedom is restricted while the officer is frisking him, but this is only a temporary inconvenience. If the officer believes that a crime is afoot, he may, without a search warrant momentarily detain a suspect on mere suspicion and pat down the exterior clothing feeling for weapons or fruits of a crime.
A "Terry stop" is named after the 1968 Supreme Court case Terry v. Ohio. That case made this kind of stop legal.
What was decided in that case was that police officers may stop and frisk a person even if they do not have probable cause to arrest that person. They are allowed to do this sort of brief and non-invasive search if they have a "reasonable suspicion" that the person has committed or is about to commit a crime.
So a Terry stop is one where the police stop and frisk someone because they feel they have a reasonable suspicion that the person has committed or is about to commit a crime.