The Internet of Things (IOT) refers to devices connected to the internet that can communicate across the network.
While this potentially includes everything connected to the internet, it usually refers to objects that are not computers, but, with the installation of sensor and simple electronics can communicate with each other and send data about their state or the state of something they are measuring. The first IOT device was, famously, a coke machine at Carnegie Mellon university that could report whether it had drinks available and if they were cold or not.
With IOT technology such devices can gather information to help perform a specific function or analyse data to improve a task or process. The three essential elements are devices that have these abilities built-in to them, the networks through which they are connected and the data that they provide.