What is Caller ID?

Legal Definition
Caller ID (caller identification, CID), also called calling line identification (CLID), calling number delivery (CND), calling number identification (CNID) or calling line identification presentation (CLIP), is a telephone service, available in analog and digital phone systems and most voice over Internet Protocol (VoIP) applications, that transmits a caller's number to the called party's telephone equipment during the ringing signal, or when the call is being set up but before the call is answered. Caller ID may be used by the recipient to avoid answering unwanted incoming calls by the concept of informed consent. However, it also poses problems for personal privacy. Usually, the caller can disable or "block" the Caller ID facility, but some call capture technology can bypass a caller block. On the other hand, the possibility of caller ID spoofing may render received information unreliable.

With appropriate hardware, networking and software, Caller ID can also be associated with a name of the calling telephone number. This service is called CNAM. The information made available to the called party may be displayed on a telephone's display, on a separately attached device, or personal computer. A modem can pass Caller ID information to a computer for purposes of call logging or blocking, but this can be problematic as modems in different countries have different systems, which may cause hardware or software incompatibilities. However, many modems are designed and programmed to handle multiple signalling methods, and can be configured to use the local standard.
-- Wikipedia
Legal Definition
A facility that identifies and displays the telephone numbers of incoming calls made to a particular line.