Note: This term may have other meanings in other contexts. Here, we are defining it in the context of a distributed database.
Isolation describes a desirable database characteristic in which concurrently-processed transactions (i.e. transactions happening at the same time) leave the database in the same state as if they were executed sequentially (i.e. one after another).
It is one of the four ACID properties that are desirable for databases dealing with transactional workloads.