A system whose primary function is to deliver web pages on request to clients. This includes as a core the delivery of HTML documents as well as any additional content that may be included by a document, such as images, style sheets and scripts.
Many web servers also support server-side scripting, e.g., Apache HTTP Server and PHP. This means that the behaviour of the web server can be scripted in separate files, while the actual server software remains unchanged. Usually, this function is used to create HTML documents "on-the-fly" as opposed to returning fixed documents. This is referred to as dynamic and static content respectively. The former is primarily used for retrieving and/or modifying information from databases. The latter is, however, typically much faster and more easily cached.
Web servers can also be found embedded in devices such as printers, routers, webcams and serving only a local network. The web server may then be used as a part of a system for monitoring and/or administrating the device in question. This usually means that no additional software has to be installed on the client computer, since only a web browser is required (which now is included with most operating systems).
(core info from wikipedia)