Flare is a fault caused by the spread of stray light across areas of a photo where it does not belong. This light may come from highlights in the photo, or from a light source outside the frame - such as sunlight or light from a bright lamp, striking the lens surface and being refracted and/or reflected through an unintended path in the lens to the photo. This may show as bright star, circular or other shapes around highlights, or may simply reduce the contrast or appear as a colour-cast across the photo.
Of course, such faults sometimes improve a photo aesthetically, and flare may be produced deliberately (or accidental flare retained) for its pictorial value. There are filters made to create intentional flare effects.
Lens hoods can be used to reduce light from outside the frame reaching the lens, and so reduce flare. One benefit of antireflection lens coatings is a reduction of flare, although some lens designs may remain flare-prone regardless.