A cache, in the realm of computers, is a temporary local holding area that stores data from a slow, relatively distant source, so that entities that are connected to the cache can access frequently needed data over a local and fast connection.
One type of cache is cache RAM, which stores frequently accessed data from the main system memory. Cache ram is usually on the same chip as the processor, or even on the same die. Cache ram is much more expensive than ordinary ram (which is why we don't just use cache ram and throw away the main system memory), but a little bit speeds up processing a lot, since the processor now no longer has to fetch data all the way from the main system memory.
Another type of cache is used in web proxies, and is used to store webpages (usually for a period of about five minutes) so that frequently accessed webpages don't have to be refetched from the web.