Inter frame
An inter frame is a frame in a video compression stream which is expressed in terms of one or more neighboring frames. The "inter" part of the term refers to the use of Inter frame prediction. This kind of prediction tries to take advantage from temporal redundancy between neighboring frames allowing to achieve higher compression rates.
Inter frame prediction
An inter coded frame is divided into blocks known as macroblocks. After that, instead of directly encoding the raw pixel values for each block, the encoder will try to find a block similar to the one it is encoding on a previously encoded frame, referred to as a reference frame. This process is done by a block matching algorithm. If the encoder succeeds on its search, the block could be encoded by a vector, known as motion vector, which points to the position of the matching block at the reference frame. The process of motion vector determination is called motion estimation.
In most cases the encoder will succeed, but the block found is likely not an exact match to the block it is encoding. This is why the encoder will compute the differences between them. Those residual values are known as the prediction error and need to be transformed and sent to the decoder.