Milestone Definition

A milestone is a scheduled event signifying the completion of a major deliverable or a set of related deliverables. A milestone has zero duration and no effort — there is no work associated with a milestone. It is a flag in the workplan to signify some other work has completed.

Usually a milestone is used as a project checkpoint to validate how the project is progressing and revalidate work. Milestones are also used as high-level snapshots for management to validate the progress of the project. In many cases there is a decision to be made at a milestone.

Other Definitions

I've also put together a description of project management fundamentals if you're interested in learning more about this profession.

References
Tom Mochal and Jeff Mochal, Lessons in Project Management