What is Letter-spacing?

Legal Definition
In typography, letter-spacing, usually called tracking by typographers, refers to a consistent degree of increase (or sometimes decrease) of space between letters to affect density in a line or block of text.

Letter-spacing should not be confused with kerning. Letter-spacing refers to a uniform adjustment to the spacing of a word or block of text affecting its density and texture. Kerning is a spacing adjustment of one or more specific pairs of adjacent characters that, because of the relationship of their respective shapes, would appear to be badly spaced if spaced normally. A classic example is a capital V next to a capital A, which need to be brought closer together.

In its original meaning with metal type, a kern meant having a letter stick out beyond the metal slug it was attached to, or cutting off part of the body of the slug to allow (other similarly-trimmed) letters to overlap. So a kern in that sense could only bring letters closer together (negative spacing), though of course it was possible to add space between letters. Digital kerning can go in either direction. Tracking can similarly go in either direction, though with metal type one could only adjust groups of letters further apart (positive spacing).

Letter-spacing adjustments are frequently used in news design. The speed with which pages must be built on deadline does not usually leave time to rewrite paragraphs that end in split words or that create orphans or widows. Letter-spacing is increased or decreased by modest (usually unnoticeable) amounts to fix these unattractive situations.
-- Wikipedia
Legal Definition
Distance between printed text characters. This spacing is adjustable to increase or decrease the average distance between letters. Can be applied to a block of text or paragraph. 'Proportional letter spacing,' adjusts the horizontal space between two characters based on the contours of their shape. A 'monotype letter spacing' has fixed horizontal spacing between printed characters, regardless of their shape or contours. As an example, the letter 'i' normally takes less space than the letter 'm' in the word 'main.' Also known as tracking.