CBD, or cannabidiol, is a plant extract and one of the compounds found in the cannabis Sativa plant. Unlike THC (tetrahydrocannabinol), the other most well-known compound, CBD is not psychoactive, so it won't get you high.
Instead, it comes with a raft of supposed health benefits. We say supposedly because the science is still out, even though labs are currently scurrying to test it out and prove the benefits, as fast as possible, and current testing looks promising.
As for what the oil actually is? It's extracted from the hemp plant, generally from the flowers and leaves, which are ground down. The hemp CBD oil is then filtered out for human use. You might hear it referred to as cannabis oil, but apart from coming from the cannabis plant, this isn't generally an appropriate term.