An ontology is a collection of fixed keywords with different relationships with a single purpose: to capture 'reality' in this standardized framework. The most well-known in bioinformatics is Gene Ontology, but other ontologies are arising.
The Gene Ontology (GO) consortium constructs and curates the "gene ontology" with a single purpose: to capture every biological process and molecule with their different properties into their structure. To this purpose, the Gene Ontology has three base categories (strangely, all with exactly 18 characters, spaces included): Molecular function, Cellular component, Biological process. The categories contain several child terms, which on their turn contain a different child term. Some terms are specific for a phylum, class or order,...
The GO structure is captured in several file formats:
- OBO flat file format (most used, at least most well known) 
- RDF-XML format 
- GO terms can be derived from lists from UniProt, KEGG, etc. in a process called mapping 
More info on the official wikipedia