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UV mapping is the process of taking a three-dimensional mesh (X, Y and Z coordinates) and unwrapping it to a flat two-dimensional image (U and V coordinates), in order to texture the 3D model with 2D images. Use this tag for questions pertaining to UV's and UV mapping.

U and V refer to texture-space coordinates, opposed to the usual X, Y and Z coordinates, which refer to 3D-space.

UV mapping on the Blender Manual and Wikipedia