To embed an object or file is to place it entirely within another file. Embedding an object in a file is not just linking to it; the embedded object becomes part of the file that contains it. For example, when a word processing document contains a bitmap image, that image is embedded. When you open the document, it shows that image alongside text seamlessly without requiring an extra action to load the image separately.
Once an object is embedded in a file, it's part of that file. Any edits or changes you want to make to the embedded object must happen within the file that contains it since that object is no longer an independent file. You could also delete the embedded object, update the file separately, and then re-import the newer version into the document.
Embedded content often appears on webpages. A small amount of HTML code can reference something on another website — like an individual tweet or YouTube video — and insert it into the webpage. The viewer doesn't need to click a hyperlink to open the content on a separate page; it's visible without any extra steps. However, unlike objects embedded in files, objects embedded in webpages still exist separately and are only pulled into the webpage at the time you load it. If a video is updated after you embed a link to it, the viewer will still get the newest version of it.
NOTE: The term "embed" can also apply to hardware, such as a computer system that is integrated into an electronic device.