Surface Mount Device. The name given to components which are soldered directly to the surface of the PCB (printed circuit board). SMD devices are very common now and replace older components which had legs (or leads) which had to pass through holes in the circuit board, also known as "leaded components" or through-hole.
Adding to the other comments, this is in contrast to "through hole" components with leads that poke through holes and are soldered to pads on the reverse side of the board.
SMT is the technology; individual devices are SMDs, or "surface-mounts" or "surface-mounted".
Beyond terminology, SMD are much harder for an individual hobbyist to desolder, replace and resolder than through-mount, but they are easier for pick-and-place machines to deal with.
If you're prototyping a simple device, you can start with a breadboard -- no soldering. Then you can get a circuit board printed to your spec and use the same components, for low-volume work. If you need high-precision placement, you will probably need to transition to surface-mount.
"Beyond terminology, SMD are much harder for an individual hobbyist to desolder, replace and resolder than through-mount, but they are easier for pick-and-place machines to deal with."
And SMD are smaller, allowing smaller circuit boards and smaller devices.
