An acronym for Unique Device Identifier - on iOS devices, the UDID is a hexadecimal string 40 characters long and not generally known by end users.
The UDID built into iOS devices is used by Apple and programmers to identify a device without using other items such as the MAC address of the Wi-Fi card or the serial number. It is an internal number that has been available to programs to read and use as a hardware unique identifier.
Apple has started to move away from allowing third party programs to access this identifier and instead asks the developers to make their own unique identifier to track which device is running a third party app.
Although the UDID is convenient for developers and Apple to track which devices are eligible for beta releases of the OS, developer builds of programs that are not yet approved for sale on the App Store, and advertisers to track advertisements to a single device - many criticize this identifier as poorly understood and leading to potential for people to be tracked when they may not be aware of how the technology works.