Cuckolding is a form of sexual activity/fetish between a couple and a third person. It is essentially a form of consensual non-monogamy, where a male partner (husband/boyfriend) watches his lover (wife/girlfriend) having sex with another male. As above said, it happens with consent between couples and the third guy.
Nomenclature
In this form of relationship/lifestyle, there are specific terms for the participants involved in the activity.
The husband/boyfriend is called the Cuckold or simply the Cuck.
The wife/girlfriend is called the Hotwife.
The third guy is called the Bull or Lover.