An ETF — exchange-traded fund — is a fund whose units are bought and sold on a stock exchange throughout the day, like a share. Most ETFs track an index.
The practical differences from a traditional fund are mechanical rather than philosophical: you trade at a live price instead of a single end-of-day valuation, and you can usually buy a single unit rather than meeting a minimum. "ETF" describes the wrapper, not the strategy — an ETF can hold a broad global index or a single narrow sector, and those are very different propositions.