Definition
The term "Hotspot" is a social term which refers to areas in which WiFi is available, either for a price or for free. WiFi allows a user to connect to the Internet wirelessly, as long as the user is within range of the wireless network. In recent years, coffee shops, airports, restaurants, hotels, etc. have played a large part in universal WiFi coverage.

Details
For example, a typical Starbucks has a Local Area Network (LAN) that is available for everyone to use. They set up a wireless router within the store, similar to the picture on the right, enabling its customers to surf the Internet. Such hotspots are generally supported by T-Mobile, AT&T and T-Home ISP's. Hotspots are notorious for security breaches because they are high traffic places in an unsecured network. Since the wireless network has little or no security, computers that are connected to the network are extremely vulnerable to hackers that are also connected to the network.

Resources
http://www.datapro.net/techinfo/wifi_term.html
http://www.geschaeftsbericht.telekom.de/en/co/glossar/index.php