HTPC stands for Home Theater Personal Computer and, as the name suggests, is used to describe a PC that is used for viewing TV, movies, listening to music, etc. in your living room or main entertainment room of your house.
There are many different types of HTPC's and figuring out what you are looking for and setting it up can be a daunting task. There are many considerations to take into account and there are a ton of resources and references on the internet for setting one up.