Extraction refers to the process of dissolving soluble compounds from ground coffee into water. Proper extraction requires using the correct quantity of coffee (the dose), ground to the correct degree of fineness, as well as controlling the temperature of the water, and the length of time that the coffee is in contact with the water.
The degree of extraction can be described by extraction yield, which is the percentage of the ground coffee that ends up in the finished drink. This can also be described by TDS (total dissolved solids), which is measured by a refractometer in PPM (parts per million), and is a measure of the amount of particles which are suspended in a liquid.
A more subtle distinction is which solubles are dissolved, as different compounds are dissolved by the water at different times and temperatures.