The basic meaning of the word transparency is in the physical sciences — specifically, in optics: a physical object is transparent if one can see through it; see transparency (optics). The sense of the word used here began as a metaphorical extension of that meaning.

In sociology, politics, ethics, law, economics, business, management, etc., transparency is the opposite of privacy; an activity is transparent if all information about it is freely available. Thus when courts of law admit the public, when fluctuating prices in financial markets are published in newspapers, those processes are transparent; when military authorities classify their plans as secret, transparency is absent.

Some organisations and networks, for example, Wikipedia, the GNU/Linux community and Indymedia, insist that not only the ordinary information of interest to the community is made freely available, but that all (or nearly all) meta-levels of organising and decision-making are themselves also published. This is known as radical transparency.

See also market transparency.