"Virtual Reality" (VR) refers to technology used to provide computer-based experience that mimics real experience. The two primary characteristics of such experience are that it is three-dimensional and that we can interact with it. Sound is also desirable. The interactive 3D spaces created using VR technology are referred to as "worlds". The files that embody these spaces are also referred to as "worlds". In the case of VRML, they have the extension ".wrl". The virtual user that represents the user in the virtual world is called an "avatar".
Virtual Reality Modeling Language (VRML) is an ASCII-based language used to describe VR worlds. Like HTML, it is an open, non-proprietary language that can be used by anyone without licensing. VRML has been officially adopted by the International Standardization Organization (ISO). It supports text, graphics, animations, and audio. VRML browsers render VR worlds on the fly, an approach that permits the interactivity that VR demands. The behavior of the VR content may be triggered or modified by the user's interaction.
VRML provides a standard for creating VR content compatible with multiple viewers. VRML is the most mature and usable VR standard at this point. VRML 97 is the latest version that has been fully implemented. See my article, Web Virtual Reality and 3D - in VRML or XML? on this site, to get an update on the emerging VR standard, X3D.