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Its a short cut key, Instead of using SAP easy access menu we can also navigate to a particular screen in SAP by entering the transaction code (T-code for short) in the command field of the standard toolbar.
A transaction code in SAP is a four letter command that tells the system to open the task location.It contains four letter or combination of letter and number e.g. OBQR or OB16. Each SAP screen has unique transaction code.
Transaction code is just like a shortcut keys
for instance : if you have to copy something CTRL + C
In SAP if you have to open general ledger you have to put FS00 in the command field then it will take you directly to the GL screen and you don't have to go by using SPRO path ... it saves time.
T code is nothing but Instead of using SAP menu we can navigate to a particular screen in SAP by entering the transaction code in the command field.