A fiat money is a money which is not backed by gold or some other commodity. Hence it's value can change over time (inflation). The US Dollar and EURO are current examples of fiat moneys.
Fiat means in Latin let it be done. Fiat money is usu. Printed into existence without the backing of any physical metal or a strong manufacturing base. Most currencies in the world today are "let it...
Because usually it is not backed up by any commodity such as gold or silver. While it is possible to have digital currency that is fully backed up by a commodity, most aren't.