An application is any program, or group of programs, that is designed for the end user. Application software can be divided into two general classes: systems software and applications software. Applications software (also called end-user programs) include such things as database programs, word processors, Web browsers and spreadsheets.
In contrast, Systems software consists of low-level programs that interact with the computer at a very basic level. This includes operating systems, compilers, and utilities for managing computer resources.
Recommended Reading: Webopedia’s enterprise application definition.
App Versus Application
A similar phrase, app is used to describe a type of application that has a single functionality whereas an application may handle a number of functions.