A unit of interstellar distance, defined as the distance light travels in a period of one year. The speed of light is constant, at about 300,000 km per second: a light year is very nearly 10 million million km. From an Earthbound perspective, this is a vast distance - our entire Solar System, out to the orbit of Pluto, is only one eight-hundredth of a light year across.
On an interstellar scale, though, a single light year is rather small. It covers less than a quarter of the distance to our nearest neighbour, Proxima Centauri. Our entire Galaxy is a little over 100,000 light years across or more.
Because a light year is directly related to the time light takes to travel through space, it follows that we look out into the universe we also look back in time. For example, in about the year 5,250 BCE, a star in the constellation of Taurus exploded. That star was about 6,300 light years from Earth, meaning that the light from the explosion took 6,300 years to cross the intervening space, and finally reached us in the year 1054 CE; that was the date that Earth-bound observers finally saw the event that created the Crab Nebula. This 'lag' is a consequence of the immense distances between the stars - when we look up at the Crab Nebula today, we see it not as it is now, but as it was in about 4,300 BCE.
Perhaps because of this, the term 'light year' is sometimes misused as a unit of time (in expressions like 'light years ago' or 'light years into the future'). This is never correct - a 'light year' is only ever used to measure distance.
In actual practice, astronomers normally prefer the parsec, a unit equivalent about 3¼ light years, rather than the light year itself. Nevertheless, the light year remains a useful conceptual unit. The term is sometimes rendered 'light-year' or 'lightyear', and often abbreviated to 'ly' or 'l.y.'.
The light year has various derivative units, of which only three are come across with any frequency:
Others can be invented for specific uses, like the 'nano-light year' (94,605 km) or the 'light millennium' (a picturesque term for 1,000 light years), but these are almost never encountered in practice. The smallest such unit possible would be the 'atto-light year', which would be just under one centimetre in length!