Literally, it's a Sanskrit term meaning "action" or "doing." Any action may be called a Karma if there is intention in the act (even if your intention was not what you thought it was).
When a person build a house, that is a karma. When a rock rolls down a hill, however, we do not say that it acts, but simply that it moves. Of course, some may argue that the rock intends to roll. This may be the reason it is still a rock. Karmas are formally thought to be of three varieties: wholesome, tending towards liberation and enlightenment; unwholesome, tending towards the maintenance of confusion and pain; and neutral.