Sterling Silver refers to a specific concentration of silver within a metal alloy - 92.5% solid silver. In essence, this means in every 100 parts of the metal in question, there are 92.5 parts solid silver. This type of silver is most commonly found in higher grade silverware and in English silver. Alternative names include 925 silver (925/1000 parts).
Other types of silver such as 800-grade silver (800/1000 parts) commonly found in German silverware are not considered "sterling silver" although it is still solid silver.