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An image is what you get when you get a file, not by copying it (using cp) but rather by taking a byte-for-byte copy of the file plus other relevant file system data associated with that file (this can be done using dd).

When you see .iso files on the net -- those are images. They're usually meant to be burnt (but not "copied" with cp) to some form of removeable media (like CD's or USB Flash drives) and are typically bootable.

An image can also refer to a collection of pixels that together form a picture