As an example, consider the function h(t) which describes the height of a growing child at time t. This function is continuous: the height doesn't "jump". If M(t) denotes the amount of money in your bank account, then this function is discontinuous: if you take money out, the function jumps abruptly to a new value.
Mathematically, the concept is defined as follows. First consider the case of a function f that maps a set of real numbers to another set of real numbers, like the two examples h and M above. This function f is said to be continuous at the point x=x0 if (and only if) the following holds: For any positive number ε however small, there exists some positive number δ such that for all x with x0 - δ < x < x0 + δ, the value of f(x) will satisfy f(x0) - ε < f(x) < f(x0) + ε. More intuitively, we can say that if we want to get all the f(x) values to stay in some teeny neighborhood around f(x0), we simply need to choose a small enough neighborhood for the x values around x0, and we can do that no matter how teeny the f(x) neighborhood is.
If f is continuous at every point of its domain, then we call it continuous, otherwise discontinuous.
An example of a discontinuous function is the function f defined by f(x) = 1 if x > 0, f(x) = 0 if x <= 0. There is no δ-neighborhood around x=0 that will force all the f(x) values to be within ε of f(0), for any ε < 1. Intuitively we can think of a discontinuity as a sudden jump in function values.
Continuity can also be characterized using limits: A function f is continuous at x=x0 if and only if limx->x0 f(x) = f(x0).
To generalize, consider a function f from one metric space (X, dX) to another metric space (Y, dY). Then f is continuous at the point x0 in X if for any positive real number ε, there exists a positive real number δ such that all x in X satisfying dX(x, x0) < δ will also satisfy dY(f(x), y0) < ε.
More generally still, we can define continuity for functions between topological spaces. Suppose f is a function from a topological space X into a topological space Y. Then f is said to be continuous at a point x in X if for every neighbourhood V of f(x) there is a neighbourhood U of x such that f(U) is a subset of V. If f is continuous at every point of X, then it is simply said to be continuous. It turns out that a function is continuous if and only if the pre-image of every open set is open, and so this is often used as the definition of continuity.