the definition from msdn: http://msdn.microsoft.com/en-us/library/fp142384.aspx
“OAuth is an open protocol for authorization. OAuth enables secure authorization from desktop and web applications in a simple and standard way. OAuth enables users to approve an application to act on their behalf without sharing their user name and password. For example, it enables users to share their private resources or data (contact list, documents, photos, videos and so on) that are stored on one site with another site, without users having to provide their credentials (typically user name and password).
OAuth enables users to authorize the service provider (in this case, SharePoint 2013) to provide tokens instead of credentials (for example, user name and password) to their data that is hosted by a given service provider (that is, SharePoint 2013). Each token grants access to a specific site (for example, a SharePoint document repository) for specific resources (for example, documents from a folder) and for a defined duration (for example, 30 minutes). This enables a user to grant a third-party site access to information that is stored with another service provider (in this case, SharePoint), without sharing their user name and password and without sharing all the data that they have on SharePoint.“
Amit Kumawat also has done a very good job trying to explain what is OAuth and how it is used.
You can find his article here.
it seems that there is one more new concept for all of us to get familiarised with.