A criterium, or crit, is a bike race held on a short course often held on blocked-off city streets. The course is short, usually less than 5 km, and is a closed circuit, where riders complete multiple laps. Riders typically race for a given length of time, then complete a specified number of laps. An example would be a race of 60 minutes plus three laps.
In addition to the typical method of determining a winner -- first rider across the finish line -- many crits have prizes that can be won while the race is in progress. Called primes (pronounced "preems"), these are given for winning specific laps along the way and are frequently cash prizes or merchandise.
Criteriums are especially nice for watching in-person as the riders pass by a given point many times over the course of a race.