It is the information directly from the sensor and not put into a format like JPG or TIFF. You can use the raw file and make settings in the software for white balance, sharpness, contrast and saturation just as if you had set them in the camera. Raw is more feature rich than TIFF and about 1/3 the size.
Raw files have to be decoded with software though. The newest Photoshop will work with them directly but for most purposes you have to convert them to a regular image format before you can use them.