The Global Cooldown, or GCD, is the delay triggered by the use of items, spells, abilities, or attacks. With a few exceptions, using any item, spell or ability will cause a brief delay within which you cannot use any other abilities. The standard duration of the global cooldown is 1.5s, but rogues have a 1s global cooldown and it can also be reduced with Haste Rating.
Because the GCD triggers on most attacks, there is a limit both to the number of attacks you can perform in a given timespan and how quickly you can react to events. While the GCD is typically not a factor with spells or items that include a cast bar, it does severely limit the number of instant-cast abilities you can use in any given amount of time. Without the GCD, a Druid could unload a dozen Moonfires in under a second. Additionally, abilities that are on the GCD reduce your ability to react to events; for example, a Warrior's Pummel is on the GCD, and so in order to interrupt most spells the Warrior must stop using other attacks in order to be ready to use Pummel.
Some abilities are not on the GCD. Some exceptions include Mage's Counterspell, Warrior's Shield Block and Spell Reflection and Paladin's Judgement. Most abilities not on the Global Cooldown are done this way because it would be a meaningless ability if the player had to wait 1.5 seconds after using it. For example, a mage would barely be able to take advantage of counterspell if they had to wait after using it.