Augmented reality (AR) is a live direct or indirect view of a physical, real-world environment whose elements are augmented (or supplemented) by computer-generated sensory input such as sound, video, graphics or GPS data. It is related to a more general concept called mediated reality, in which a view of reality is modified (possibly even diminished rather than augmented) by a computer. As a result, the technology functions by enhancing one’s current perception of reality. By contrast, virtual reality replaces the real world with a simulated one.
Augmentation is conventionally in real time and in semantic context with environmental elements, such as sports scores on TV during a match. With the help of advanced AR technology (e.g. adding computer vision and object recognition) the information about the surrounding real world of the user becomes interactive and digitally manipulable. Information about the environment and its objects is overlaid on the real world. This information can be virtual or real, e.g. seeing other real sensed or measured information such as electromagnetic radio waves overlaid in exact alignment with where they actually are in space. Augmented reality brings out the components of the digital world into a person's perceived real world. One example is an AR Helmet for construction workers which displays information about the construction sites. The first functional AR systems that provided immersive mixed reality experiences for users were invented in the early 1990s, starting with the Virtual Fixtures system developed at the U.S. Air Force's Armstrong Labs in 1992.
Augmented Reality Books
If you want to read more about augmented reality, here are some books I can highly recommend.