A Satellite is any object orbiting a planet. Satellites can come in the form of other planets or moons, or artifical objects.
Satellites in KSP
Satellites in KSP can be used for unmanned flights to test rocket designes, or to travel to other planetary bodies to collect scientific data. As of V 0.25, satellites are not available until later in career mode due to the lack of command probes.
The following planetary bodies are natural satellites: