Steganography is the art or practice of concealing a message, image, or file within another message, image, or file. - Wikipedia
In the context of CTFs steganography usually involves finding the hints or flags that have been hidden with steganography. Most commonly a media file will be given as a task with no further instructions, and the participants have to be able to uncover the message that has been encoded in the media.
Images are a very common medium for steganography, as they are easy to manipulate and simple to view and transport. Files in Images give a good introduction for beginner steganography.
A rudimentary knowledge of media filetypes (e.g. jpg, bmp, png for pictures and wav, mp3 for sound) is essential to steganography, as understanding in what ways files can be hidden and obscured is crucial. Also, understanding basic linux is important, as a multitude of tools are specifically for bash.