The RAW is a generic photography term that relates to one of two file types that is output from your camera, the other being JPEG. It’s always written in capitals, although it doesn’t actually stand for anything. Canon’s RAW file format is known as CR2. 

So why would you shoot in RAW, as opposed to JPEG?
 
With JPEG images, your camera takes the shot, applies certain settings, compresses it, then saves it. With RAW images, the photo retains almost all of the original data from the sensor. This gives the photographer the flexibility to finely tweak settings such as noise reduction, sharpness, white balance etc., before saving the final image as a JPEG. Most commonly, this is done on a computer using a program such as Adobe Lightroom, or Canon Digital Photo Professional.
 
While it does provide the perfect platform for post production, shooting in RAW means that you will fill up your card quicker, because the file sizes are generally 5 times larger. It also requires you to spend time ‘developing’ the images before they can be shared.

See JPEG for more information.