Unlocked cell phones are phones that can use a different carrier’s SIM card. In many cases, an unlocked cell phone will work just fine on the GSM networks of AT&T in the United States and T-Mobile USA in the United States. Basically you can swap out SIM cards as needed to change carriers without having to buy a new phone or handset day from day.
You may also hear radios referred to as “unlocked” so they don’t have any hardware restrictions when it comes to connectivity (manufacturing). Regardless, most people use this term when talking about handsets.