What is haptics?

"Haptics" refers to the use of tactile sensation in human interaction with data. That is, in essence, a physical interaction with virtual content.
This is most often accomplished through the use of some electro-mechanical device which is used with the hand, both for delivering some sort of input to the virtual environment (such as the position of a virtual tool, or just a cursor position in virtual three-dimensional space) as well as providing tactile feedback to the user via resistance to hand movements or even active movement of the physical device. Often, the part of the device that is held is a pen-shaped stylus.
This allows the user to interact with the virtual environment via not only the more usual visual means, but also via tactile sensation. Thus, more of the user's senses are engaged, and the interaction with the virtual world is more involved.
Applications include virtual sculpting, teaching and training of medical procedures, remote control of physical devices, and data visualisation (extended beyond visual information only, of course).