Any part of an object or graphic that light does not fully reflect off of, and thus can be seen through. Also applies to translucency effects.
As a designer term, transparency is used to refer to both full transparency, in which light fully passes through, and partial transparency, in which light only partially passes through. In games, it thus simply refers to any ability to see through an object onto objects that are further in the background, colorized or not.
In 2D games, transparency is used not just for actual materials, but also to represent empty space, due to how sprite images are stored. In 3D games, empty space transparency is a default, so the term instead applies more to physical models, whole or in part, which can be seen through.
Questions with this tag handle the various techniques and implementations of transparency in both 2D and 3D games.