The term "neural network" signifies a computing system inspired by the biological neural networks found in human brains. In AI development, neural networks are used to model complex patterns and relationships in data through interconnected layers of artificial neurons. They are especially effective for tasks like image recognition, natural language processing, and recommendation systems. The ability of neural networks to learn from large datasets and improve over time makes them a cornerstone of modern machine learning and AI applications, driving significant advancements in various fields.