A server left intentially open or made easy-to-crack for the purposes of security research. From this vantage point, crackers’ techniques can be observed and learned-from. Honeypots are often used to take the fall for a DDOS, watch efforts made in a select area (such as a university network), or simply to observe general types of attacks carried out against other servers.
Because of the obscurity and wide variety of crackers on the Internet, the honeypot can help determine popular attacks and allow sources to learn from their use.
The term comes from another biological equivilent, much like “virus” and “worm.” It refers to an area which is sweet and desirable to an animal or insect that attracts visitation and allows the creature to be observed.
An unpatched Windows OS acts like a honeypot when it is connected to the internet. These machines help distribute worms and let backdoors and other exploits roam freely.
Another definition is available here.
TakeDown.NET -> “Honeypot”