Central Processing Unit. Also known as a microprocessor, a CPU is the brains of a computer. To be more specific, a CPU fetches program instructions from RAM (input), interprets and processes it (execution) and then sends back the computed results so that the relevant components can carry out the instructions.
A CPU is a complex integrated circuit made of silicon. A modern CPU can have billions of microscopic transistors mounted on it. The CPU is typically enclosed by a metallic heat spreader which allows for better heat dissipation.
Now that we know what does CPU mean, let's take a look at it. The first image shows the top of a CPU with its heat spreader while the second image shows the bottom where you can see the golden CPU pins: