Puppy mill is a disparaging term for the practices of some dog breeders.
Some dogs (or puppies) are bred by reputable breeders, who raise a small number of dogs and provide humane conditions, good socialization and formal training to their charges. Often potential owners go through a screening process and spend time with many of the dogs before being matched to a dog.
Unfortunately, some breeders are motivated by money rather than love and respect for the animals that they raise. These breeders are commonly referred to as "puppy mills", alluding to the conditions and emphasis on quantity and profitability over humane treatment and quality.
Puppy mill dogs are raised in overcrowded, inhumane conditions, are poorly socialized, receive no training whatsoever and often suffer from medical conditions that are not disclosed to potential buyers. It is not uncommon for these breeders to misrepresent the breed of dog being sold, and the vast majority of these animals are sold to pet stores.
Purchasing dogs from a pet store is therefore strongly discouraged by reputable breeders and animal shelter employees alike; it is assumed that many animal shelter dogs are pet store dogs who were purchased on impulse and abandoned when the owner loses interest. While many pet stores claim to purchase dogs from "local breeders" instead of puppy mills, this is often untrue or is a difference in name only, as reputable breeders do not sell animals to pet stores.
The concepts of the reputable breeder and the puppy mill both apply only to purebred dogs; mixed-breeds, or mutts, are generally given away by the people who own the parent animal.
In the United Kingdom, "puppy farming" is the term used to describe these intensive breeding methods.