Letter spacing
Extra space added evenly between every pair of letters in a line.
See it in Text flow. Move Letter space left and right and watch the words tighten and loosen.
In plain words
Every typeface comes with its own spacing between letters. Letter spacing adds to it or takes some away, the same amount between each pair. Wide spacing can make short labels feel calm and airy. Large headings often look better a little tighter. Too much either way makes words hard to read.