Terroir was originally a French term used to denote the special characteristics that a unique geography bestowed upon wine. It can be very loosely translated as 'a sense of place' which is embodied in certain qualities, and the sum of these effects that the local environment has on the wine.
The concept of terroir is at the base of the French wine AOC system that has been a model for appellations, wine laws across the globe. At its core is the assumption that the land from which the grapes are grown imparts a unique quality and character that is specific to that region and place. The amount of influence that falls under the description of 'terroir' has been a controversial topic.

 

The concept of 'terroir' developed through centuries of French winemaking based on observation of what made wines from different regions, vineyards or even different sections of the same vineyard so different from each other.
The French began to crystallize the concept of 'terroir' as a way of describing the unique aspects of a place that influences the wine made from it. While wine experts disagree to the exact definition, a large focus is given to the natural elements that are generally considered beyond the control of man.
Some of the components described of 'terroir' include: Climate - Soil type & Topography.
The interaction of climate and 'terroir' is generally broken down from the macroclimate of a larger area (e.g. the Cote de Nuits region of Burgundy), down to the mesoclimate of a smaller subsection of that region (e.g. the village of Vosne-Romanee) and even to the individual microclimate of a particular vineyard or row of vines (like the Grand Cru vineyard of Romanee-Conti). The element of soil relates both to the composition and the intrinsic nature of the vineyard soils, such as fertility, drainage and ability to retain heat.
Topography refers to the natural landscape features like mountains, valleys and bodies of water, which affect how the climate interacts with the region, and includes elements of aspect and altitude of the vineyard location.