Cancel is a general term in any fighting game and can mean many things, depending on the context. Usually it refers to canceling a normal into a special in the Street Fighter series, denoted by "xx" in combo notation. This is also known as a "two in one", as you perform the motion for the special immediately after inputting the normal. An example of a cancel with Ryu is: low forward xx fireball, which means you would input down+forward kick, then immediately move the stick to down forward, forward, and press punch.
Some moves are cancelable and some are not; refer to each individual game for details.