Many CPUs have “vector” or “SIMD” instruction sets which apply the same operation simultaneously to two, four, or more pieces of data. Modern x86 chips have the SSE instructions, many PPC chips have the “Altivec” instructions, and even some ARM chips have a vector instruction set, called NEON.
“Vectorization” (simplified) is the process of rewriting a loop so that instead of processing a single element of an array N times, it processes (say) 4 elements of the array simultaneously N/4 times.
I chose 4 because it’s what modern hardware is most likely to directly support for 32-bit floats or ints.
The difference between vectorization and loop unrolling:
Consider the following very simple loop that adds the elements of two arrays and stores the results to a third array.
for (int i=0; i<16; ++i)
C[i] = A[i] + B[i];
Unrolling this loop would transform it into something like this:
for (int i=0; i<16; i+=4) {
C[i] = A[i] + B[i];
C[i+1] = A[i+1] + B[i+1];
C[i+2] = A[i+2] + B[i+2];
C[i+3] = A[i+3] + B[i+3];
}
Vectorizing it, on the other hand, produces something like this:
for (int i=0; i<16; i+=4)
addFourThingsAtOnceAndStoreResult(&C[i], &A[i], &B[i]);
Where “addFourThingsAtOnceAndStoreResult” is a placeholder for whatever intrinsic(s) your compiler uses to specify vector instructions.
Terminology:
Note that most modern ahead-of-time compilers are able to auto vectorize very simple loops like this, which can often be enabled via a compile option (on by default with full optimization in modern C and C++ compilers, like gcc -O3 -march=native). OpenMP #pragma omp simd is sometimes helpful to hint the compiler, especially for “reduction” loops like summing an FP array where vectorization requires pretending that FP math is associative.
More complex algorithms still require help from the programmer to generate good vector code; we call this manual vectorization, often with intrinsics like x86 _mm_add_ps that map to a single machine instruction as in SIMD prefix sum on Intel cpu or How to count character occurrences using SIMD. Or even use SIMD for short non-looping problems like Most insanely fastest way to convert 9 char digits into an int or unsigned int or How to convert a binary integer number to a hex string?
The term “vectorization” is also used to describe a higher level software transformation where you might just abstract away the loop altogether and just describe operating on arrays instead of the elements that comprise them. e.g. writing C = A + B in some language that allows that when those are arrays or matrices, unlike C or C++. In lower-level languages like that, you could describe calling BLAS or Eigen library functions instead of manually writing loops as a vectorized programming style. Some other answers on this question focus on that meaning of vectorization, and higher-level languages.