Low fantasy is a subgenre of fantasy. Low fantasy stories typically do not have big themes, such as the nature of life and death, or the nature of power, and often do not take place in heavily-developed settings.
The term ‘low fantasy’ is used in contrast to ‘high fantasy’. High fantasy stories typically have big themes, such as the conflict between good and evil, what it means to be morally good or morally bad, the nature of life and death, the nature of power, et cetera. Low fantasy stories typically don’t have these themes. High fantasy stories often take place in heavily-developed settings – settings which include a lot of fantasy elements, such as magic, fantasy races and creatures, fantasy clothing and weapons, alternate societies, cultures, languages, et cetera. Low fantasy stories often don’t take place in such settings. Low fantasy stories may be set in real places, with the inclusion of only a few magical elements. (But note that it is not whether a story takes place in the real world or not that determines whether it is high fantasy or low fantasy – any story which includes magical elements by definition does not take place in the real world.)
The distinction between low fantasy and high fantasy is not a strict one – there are many stories which are somewhere between true low fantasy and true high fantasy. An example of this is George R. R. Martin’s A Song of Ice and Fire series. That series takes place in an entirely different world – one which is heavily developed, with its own polities, cultures, traditions, languages, and with magic and many magical creatures. However, its themes include: identity in a world where you can only be identified by your face, and where your name determines your status in society; how knowledge is passed down or forgotten over the course of centuries; and how gallantry and chivalry can actually put you at a disadvantage against your enemies. Consequently, A Song of Ice and Fire is often thought of as a low fantasy story, even though it has aspects of both low fantasy and high fantasy.
The term ‘low fantasy’ is not a negative term. It does not refer to the quality of the story in any way.
The term ‘low fantasy’ is sometimes used interchangeably with the term ‘sword and sorcery’.