As Matt said, (in physics) a plasma is an ionized gas. Basically as you heat up matter (atoms) it goes from a solid (atoms stuck fast to each other) to a liquid (atoms stay in contact but slide around each other) to a gas (atoms bouncing off each other) to a plasma (the atoms bounce so hard that electrons get knocked off and bounce around on their own).
Since in the plasma (some of) the electrons are kicking around freely electrical currents can flow through it (like in a neon sign) and it is also affected by (and affects) magnetic fields. Solar ETC..