Hi Greg.
In a nutshell, 'improvisation' is the art of creating music on the spot ... not just playing the same thing every time ... making it up as you go. You need to know how music works and where all the bits and pieces are on the fretboard to do this, obviously.
Some music, most probably, is written out, meant to be played exactly the same way each time; improvising is the opposite. It's free-form, but still follows the rules.
There's a whole lot more to it!!
If you
go to this page you'll see a little movie of me improvising over a backing track. None of the lines I play were written out or memorized, and each pass through the progression is different from the others. I could play through those chords all day long and keep finding new ways through them, exploring both elements of music: sound and time. It's very addictive.