Leader is the length of the line between your main line and terminal tackle (hook or lure).  Leader is generally used to reduce visibility of the line to the fish and provide stronger mire abrasion resistant lead to handle bigger (often toothy) fish while still allowing a smaller diameter main line for longer accurate casting.  

Monofilament, fluorocarbon, and surflon (nylon coated stainless steel wire) are examples of leader material.