A cooldown is a gameplay mechanic which sets a timer on an ability or other interaction, limiting the rate at which it can be activated.
Some abilities have cooldowns as an element of their functionality. Oftentimes, cooldowns are incorporated into an ability by game designers in order to balance the power of that ability against its effect. Without such limiters, wild swings in balance from one class to the next would abound.
For example, a healer's ability to revive a fallen ally during combat would create a significant game imbalance if it did not have a long cooldown associated with it (say, at least 5 minutes). Or, if a dps could activate his/her most powerful ability as fast as they could click a button, they would never do anything else. The game would become one-dimensional and quickly become boring. Cooldowns were concepts added because of this.
Cooldowns can range anywhere from a few seconds to over an hour or more. When an ability with a cooldown is not available, it is described as being "down".
Other Types of Cooldowns
Cooldowns are not only incorporated into abilities. While not commonly referred to as cooldowns in the typical sense, the basic principle remains the same - a timer limit on some element of the game for the purposes of balance. Items, equipment, operations and even key interfaces with NPCs may have cooldowns as part of their design.