Hypertext is the organization of information units into connected associations that a user can choose to make. An instance of such an association is called a link or hypertext link. (And the highlighted word "link" in the previous sentence is an example of a hypertext link.)
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Hypertext was the main concept that led to the invention of the World Wide Web, which is, after all, nothing more (or less) than an enormous amount of information content connected by an enormous number of hypertext links.
The term was first used by Ted Nelson in describing his Xanadu system.
Also see hypermedia.