Extortion is a criminal offense, which occurs when a person obtains money or other goods from another by threatening or inflicting harm to his person, reputation, or property. Euphemistically, not causing harm is sometimes called "protection".
Blackmail is one kind of extortion -- specifically, extortion by threatening another's reputation with the disclosure of infamous statements (true or false) about him. Even if it is not criminal to disclose the information, it constitutes extortion to demand money or other consideration not to disclose it. 
Extortion is distinguished from robbery. In robbery, the offender steals goods from the victim whilst threatening him with force. In extortion, the victim willingly turns the goods over to avoid a threatened violence or other harm.
The term extortion is often used metaphorically to refer to usury or to price-gouging, though neither is legally considered extortion.