Material for starting a fire. Finer and lighter than kindling. Small dry sticks, fuzz, and so on that are used to help light a fire.
Basically, anything that can be ignited by a match, or anything that begins to glow under even a meager shower of sparks.
(1) Tinder is actually a lot finer than small dry sticks. Think shredded (unused) toilet paper, or dried moss before it's been gummed by slugs. Now you're cooking. Or soon will be.
(2) Actually, tinder is extremely fine, like shredded grass or tissue paper, and kindling is the next step up. Both are important in getting a wood fire burning with the even heavier (and harder to light) fuel.