Serrations are the scalloped teeth ground into a cutting edge. They concentrate force at the points and saw through fibrous material like rope, webbing and bread far better than a plain edge, and they stay useful long after they stop feeling sharp.
A serrated edge touches material at a small number of points instead of along a continuous line, so the pressure at each contact point is much higher. The recesses between the teeth then trap the fibers and shear them as you draw the blade.
They also stay effective as they dull, because the protected recesses wear far more slowly than the exposed points. A well-worn serrated edge still cuts rope when a plain edge of the same age has given up.
Serrations tear rather than slice. On anything you want a clean cut through, they leave a ragged edge, and they are poor at push cuts and detail work.
Sharpening needs a tapered rod sized to each scallop, worked one serration at a time from the ground side only. A flat stone will flatten the teeth off entirely. A combo edge is the usual compromise.
The term is not academic here. 85 of the products currently on our shelves describe this feature in their own manufacturer specifications, across 7 of the nine brands we stock. Examples in stock right now include Case Kitchen Set Walnut, Case Steak Knife Set Walnut, Gerber Propel Downrange A/O.
Everything below is pulled live from the catalog, so what you see is what is actually in the Woodlawn warehouse today.