Besides being fun to say, plasma is a very important concept in physics. But what is it, exactly?
Well, it's one of the four fundamental states of matter, alongside our friends solids, liquids, and gases. It can be found even in household objects, such as fluorescent light bulbs, plasma televisions, and the Sun. It is essentially a medium of unbound positive and negative particles, meaning it is generally neutral (the charge is close to zero). When a plasma moves, these charges create current, and therefore magnetic fields. They are in turn affected by the fields of other plasmas.
To create a plasma, ionization must occur, meaning a substance must lose or gain electrons. To do this, a gas is either heated or subjected to an electromagnetic field. Since the resulting plasma is a very good electrical conductor, its electric fields are very small, leading to a concept known as "quasineutrality", where over large volumes of the plasma, the density of positive and negative charges are about the same. (There may be charge imbalances when taking into account smaller volumes.)
Why is this important? Well, aside from being the most abundant state of matter in the Universe in mass and volume, it is vital in fusion, the process of fusing light atoms together to release great deals of energy. To get these atoms close enough together to counteract their repellent electric forces, researches try to maximize the ion density in a small region. To do this, reactors are heated to levels that even surpass the temperature of the Sun's core, and this converts hydrogen gas into plasma. From here, lasers/magnetic fields confine this plasma into a tiny region where fusion can take place. This, of course, is still a work in progress, but one that is essential to our current energy crisis.