Handicap is number used to determine the level of golfer that you are. The lower the handicap, the better the player you are. Handicaps are determined by a formula put out by the PGA but is basically your average score of your top 25% of games minus 72. If you are an 8 handicap, when playing your best golf, you will average 80 strokes per round. If you are an 8 handicap and you play someone who is an 18 handicap, you would be required to give that player 10 strokes in stroke play to make the match even. It is basically a way that good and bad players can play together and still be competitive.
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