A target audience is the specific group of people a business's product, messaging and brand identity are designed to appeal to — defined narrowly enough to make real design and marketing decisions, not so broadly that it means "everyone."
A useful definition goes beyond basic demographics (age, location, income) to include what the audience currently believes, what alternatives they're comparing you against, and what specifically would make them trust a new option over their current one.
Design decisions — tone, color, typography, imagery — should trace back to this definition directly. If a visual choice doesn't connect to something specific about the target audience, it's likely based on personal taste rather than strategy.