A Variable Character Field (or varchar) is a set of character data of indeterminate length.
The term varchar specifically refers to a data type of a field (or column) in a database management system. Varchar fields can be of any size up to the limit imposed by the database (commonly 4000 characters), unless a lower limit is specified in the table's definition. Varchar data types are common amongst all popular database management systems.
CHAR and VARCHAR documentation for Transact-SQL at MSDN.