Opacity (pronounced "o-pass-ity," not o-pace-ity") describes how opaque an object is. While it is not specific to computer terminology, the term is often used in computer graphics software. For example, many programs include an "Opacity" setting that allows you to adjust the transparency of an image.
To understand opacity, it is important understand what "opaque" means. An opaque object is completely impervious to light, which means you cannot see through it. For example, a car door is completely opaque. The window above the door, however, is not opaque, since you can see through it. If the window is tinted, it is partially opaque and partially transparent. The less transparent the window is, the higher its opacity. In other words, transparency and opacity are inversely related.
Most digital images are 100% opaque. For example, if you open an image captured with a digital cameras, it will be completely opaque. However, you can use an image editing application to adjust the opacity of the image. This is especially useful when editing an image with multiple layers. For instance, Adobe Photoshop allows you to adjust the opacity for each layer from 0 to 100. 0 is completely transparent (or invisible), while 100 is completely opaque. By sliding the opacity of each layer somewhere in between 0 and 100, you can overlay multiple layers on top of each other, creating a multilayer image mosaic.
NOTE: When saving a semi-transparent image, it is important to save the file in a format that supports multiple levels of opacity. JPEG does not support transparency at all and GIF only supports fully transparent or fully opaque pixels. The PNG format is the best choice since it includes an alpha channel, which stores an opacity setting for each pixel.