Astigmatism is an imperfection in the curvature of the cornea or in the shape of the eye's lens. Normally, the cornea and lens are smooth and curved equally in all directions, helping to focus light rays sharply onto the retina at the back of your eye. However, if your cornea or lens isn't smooth and evenly curved, light rays aren't refracted properly. This is called a refractive error.
Excellent information on astigmatism is available from the American Academy of Opthalmology website here