What is Terry Stop?

Legal Definition
In the United States, a "Terry stop" is a brief detention of a person by police on reasonable suspicion of involvement in criminal activity but short of probable cause to arrest.

The name derives from Terry v. Ohio, 392 U.S. 1 (1968), in which the Supreme Court of the United States held that police may briefly detain a person whom they reasonably suspect is involved in criminal activity; the Court also held that police may do a limited search of the suspect's outer garments for weapons if they have a reasonable and articulable suspicion that the person detained may be "armed and dangerous".

To have reasonable suspicion that would justify a stop, police must be able to point to "specific and articulable facts" that would indicate to a reasonable police officer that the person stopped is, or is about to be, engaged in criminal activity (as opposed to past conduct). Reasonable suspicion depends on the "totality of the circumstances", and can result from a combination of facts, each of which is by itself innocuous.

The search of the suspect's outer garments, also known as a patdown, must be limited to what is necessary to discover weapons; however, pursuant to the "plain view" doctrine, police may seize contraband discovered in the course of a frisk, but only if the contraband's identity is immediately apparent.

In some jurisdictions, persons detained under the doctrine of Terry must identify themselves to police upon request. In Hiibel v. Sixth Judicial District Court of Nevada, 542 U.S. 177 (2004), the Court held that a Nevada statute requiring such identification did not violate the Fourth Amendment's prohibition against unreasonable searches and seizures, nor, in the circumstances of that case, the Fifth Amendment's privilege against self incrimination.
-- Wikipedia
Legal Definition
A terry stop is another name for stop and frisk; the name was generated from the U.S Supreme Court case Terry v. Ohio. When a police officer has a reasonable suspicion that an individual is armed, engaged, or about to be engaged, in criminal conduct, the officer may briefly stop and detain an individual for a pat-down search of outer clothing. A Terry stop is a seizure within the meaning of Fourth Amendment.

In a investigatory stop is met whenever it is lawful for the police to detain an automobile and its occupants pending inquiry into a vehicular violation. The police do not need to believe that any occupant of the vehicle is involved in criminal activity.

In a recent case, Floyd v. City of New York 813 F. Supp.2d 417 (2011), the court held the New York stop-and-frisk policy violated the Fourth Amendment because it rendered stop and frisks more frequent for blacks and Hispanics.

Relevant reading:

Terry v. Ohio