Literally the type of a file.
FileTypes are ideally standard-related, such as "utf-8 text" or "ASCII text" or "PGP encrypted" by may also be linked to the application that created them.
See magic(5) and file(1) for how file types are determined on Unix/Linux systems. Windows systems use filename extensions to determine file types and Macs use type- and creator-codes stored in a fork in the file itself.
One page links to FileType: