DPI stands for Dots Per Inch. It is a measure of the density of a print or video image, i.e., the number of dots that can be placed in a line within a distance of 1 inch or 2.54 cm. Technically it means printer dots per inch.
In computers, DPI refers to a measure of the sharpness on a display screen, and in printing, it is a measure of printed image quality on the paper or the printer resolution, which indicates the number of ink dots that a printer can place in one square inch. The more dots per inch, the higher the resolution.
DPI is widely used to evaluate the quality of the digital photo printing and to indicate the quality of the printer. The number of different coloured dots which can fit into a one-inch space provides information about the resolution of an image. So, the resolution of the printer or a scanner is measured in dots per inch. For example, a printer with a resolution of 400 means it has 400 dots in a row across as well as in a row down. If the dots are more per inch, the space between dots will be less, and thus colour droplets could mix easily to produce high-quality images. So, the dots printed by a printer should be close enough to form a photo. The closer they are, the sharper the image, so the DPI should be high if you want to print clear and sharp images.