Clipping
Definition
Distortion that occurs when an audio signal exceeds the maximum level a system can handle. In digital systems, clipping causes a hard truncation of the waveform, producing harsh, inharmonic distortion.
In Simple Terms
What happens when your audio is too loud for the system to handle — it chops off the tops of the sound waves, creating harsh, crackling distortion. In digital audio, this is almost always bad and can't be undone.
Common Confusion
Soft clipping in analog hardware can be musically useful and even desirable. Hard digital clipping is almost always destructive and irreversible.