Fan art or fanart is a type of artwork that is based on a person or item that the artist did not create. The term is usually used to denote any art that has been created in this manner, although, strictly speaking, "fan art" means art derived from a visual medium, like comics, or movies, and it makes use of existing artwork - as opposed to book illustration, which uses no visual reference but the artist's imagination of characters described by an author. Thus, artwork depicting Wolverine from the X-Men (either the comic or the movie) or Orlando Bloom as Legolas would be fan art, while a picture featuring a non-movie-inspired Legolas should rather be called "book illustration".
Some people use the term "fan art" for any artwork done in Manga or Anime style, sometimes in a derogatory way. A depiction of Yu-Gi-Oh or Sailor Moon characters would indeed be fanart, but not a character that is the artist's creation, but done in an Anime or Manga style. Many artists do not like it if their artwork is being classified as "fan art", unless it it really derived from another's artwork.
Fan art is, strictly speaking, a violation of the original creators' copyright, but since it is usually intended as a tribute the copyright holders tend to tolerate it as long as the fan does not try to make money out of it.
See also
Fan fiction
Fanart from several fandoms
