Experience points

experience points, n., D&Dism 1. in Dungeons & Dragons and other RPGs, points given to reward characters for success in combat, task-completion, and story advancement; accumulation of points allows characters to advance levels, which in turn give access to greater abilities and increased stats. Also EP, XP. [GJ1]
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Addendum: As would be expected, different games handle experience points differently. In games such as D&D where it's a set level system, XP is simply a way to tell a player when the character advances. Others that are experience-driven, such as Shadowrun or World of Darkness games, the awarded experience is directly spent to advance the character. 
Addendum #2: As many gamers will do any number of psychotic things in game (and out of game) in order to get those last few points to level their character up, especially if they're just short, some GMs will use XP rewards as social engineering in their game, a reward for actions they like to see in their game such as good role-play or beneficial actions to the party. Also, others will offer XP bonuses for OOC actions such as bringing food for the GM/gaming group, showing up on time, or even just as bribery to reign in a problem player.