Stereo means solid, and the term can be applied to any system using more than one channel, such as four or five channel sound. However it is more commonly used to refer exclusively to two channel systems.
The purpose of stereo recording is to recreate a more natural listening experience where the spatial location of the source of a sound is, at least in part, reproduced.
Although stereo can have two independent channels, often the signal on one channel is related to the signal on the other channel. For example, if the same signal is recorded on both channels, then it will appear as a central phantom image when played on loudspeakers. That is, the sound appears to becoming from between the loudspeakers.
Stereo contrasts with mono, and also with multichannel audio which can control a larger number of speakers independently, such as the 5.1- and 6.1-channel systems used on high-end film and television productions.
Many people refer to audio players as "a stereo."