GIF stands for Graphics Interchange Format. It's an old but hugely popular image format that can store a short, silently looping animation. Its defining limits are that each frame uses at most 256 colours and it has no sound.
Those limits are why GIFs of real video often look grainy and end up large — photographic colour doesn't fit into 256 shades. For anything longer or more colourful, an MP4 is usually better.
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How a GIF is put together
A GIF is a stack of still images with a delay attached to each, plus an instruction to loop. There is no timeline, no audio track and no concept of a frame being similar to the one before it. Each frame carries its own colour palette of at most 256 entries, and compression happens only within a frame, never across them. Everything people find frustrating about GIFs follows from those two constraints.
Why the 256-colour limit matters
A photograph contains thousands of subtly different tones. Squeezing those into 256 slots produces either visible banding, where smooth gradients break into steps, or dithering, where scattered dots trick the eye into perceiving intermediate shades. Dithering looks better but introduces fine-grained noise that GIF compression handles poorly, so it inflates the file. This is why screen recordings, interface demos, cartoons and line art convert beautifully, while sunsets, skin tones and dim footage rarely do.
Why GIF survived
By every technical measure video formats are better. GIF persisted for social reasons: it plays automatically, silently, and inline in essentially every chat window, email client and forum ever built, with no player, no controls and no permission prompt. That universality is the whole value proposition. Most large platforms now silently convert uploaded GIFs to video behind the scenes while keeping the name.
The pronunciation
The format's creator, Steve Wilhite at CompuServe in 1987, intended a soft G. Most of the world says it with a hard G. Both are in general use and neither is going to win.