In Analytics, a source is an origin of a traffic. Examples of sources are the Google search engine, the name of a newsletter, or the name of a referring website. Analytics automatically captures the source of traffic and displays it in your reports, but you can also create new sources by tagging links with utm_source. For example, traffic from the following link will have a source of "newsletter1".
Source is one of the five campaign tracking dimensions; the other four dimensions are campaign, medium, term, and content.