Terminals were hardware devices that consisted of a keyboard and an output device (initially a line printer, later a CRT monitor). A large computer could have several remote terminals connected to it. Each terminal would have a protocol for communicating efficiently with the computer, for CRT-based terminals this includes having special "control sequences" to change cursor position, erase parts of the current line/screen, switch to an alternate full-screen mode, ...
A terminal emulator is an application emulating one of those older terminals. It allows to do functions like cursor positioning, setting foreground and background colors, ... Terminal emulators try to emulate some specific terminal protocol, but each has its own set of quirks and deviations.
Unix systems have databases describing terminals and terminal emulators, so applications are abstracted away from the particular terminal (or terminal emulator) in use. An older database is
terminfo(5) is a newer database. These databases allow applications to query for the capabilities of the terminal in use. Capabilities can be booleans, numeric capabilities, or even string capabilities, e.g.: if a specific terminal type has/supports a F12 key, it will have a capability "key_f12" (long terminfo name), "kf12" (short terminfo name), "F2" (termcap name) describing the string that key produces. Try it with:
tput kf12 | od -tx1.
Since programming directly with capabilities can be cumbersome, applications typically use a higher-level library like curses/ncurses, slang, etc...
There is a special environment variable called
TERM that tells applications what terminal type they are talking to. This variable should be set to the exact terminal type if it exists in the database, for best results. This just tells the application which precise protocol and protocol deviations does the terminal understand. Changing the
TERM variable does not change the terminal type, it just changes the terminal type the application thinks it is talking to.