AppStream is a metadata specification, allowing to write metadata for software projects in a standardized format. It provides facilities to easily access and transform the data, as well as a few additional services to allow building feature-rich software center applications.
AppStream is a cross-distribution effort for enhancing the way we interact with the software repositories provided by (Linux) distributions by standardizing software component metadata.
It provides the foundation to build software-center applications, by providing metadata necessary for an application-centric view on package repositories. AppStream additionally provides specifications for things like an unified software metadata database, screenshot services and various other things needed to create user-friendly application-centers for (Linux) distributions.
You can find more info. on the in-depth specification at https://www.freedesktop.org/wiki/Distributions/AppStream/