Oracles in crypto are covered in full under blockchain oracle, which explains their design and history in detail. This page explains the plural term as it is usually used and points to related entries.
Blockchains cannot see the outside world on their own. A smart contract can read balances and transactions on its own chain, but not the price of gold, the score of a match or the weather. Oracles are the services that bring such data on-chain, usually by having one or more operators sign and publish it. Lending, derivatives and stablecoin protocols depend on them for prices that decide loans and liquidations.
The word covers several designs. Push-based price feeds, such as those run by Chainlink, publish data from many sources at regular intervals. Pull-based oracles let applications fetch signed data when needed. An optimistic oracle accepts answers unless they are challenged, which suits event questions. Because so much money relies on their accuracy, oracles are a frequent target, and distorting their data is known as oracle manipulation. The value created when an oracle update opens profitable trades is called oracle extractable value. Outside crypto, "Oracle" is also the name of a large software company, which is unrelated.