A mid cap is a company with a relatively mid-sized market capitalization, generally between $1 billion and $5 billion.
In numbers, there are more mid cap companies than either large cap or mega cap. The S&P 500 index contains all of those, while the Russell Midcap index contains approximately 800 companies. As that index is rebalanced only once a year and is strictly formed by counting a certain subset of companies, the market cap range it encompasses could vary significantly from the $1 billion to $5 billion range given above.
Mid cap companies are generally still in the growth portion of their life cycles. Thus, they may or may not pay a dividend, often deciding to continue to reinvest in growing future operations and earnings ability. For investors looking for stock price appreciation, mid cap companies provide a fertile hunting ground. They are not as risky as small cap, micro cap, or (especially!) nano cap companies, because of their larger size and presumed better staying power, but they are not as staid or established as large or mega cap behemoths. This is not to say that mid cap companies are without risk. Far from it! Competition can be fierce as a number of players jockey for position within and dominance of a particular market niche. But for the discerning and disciplined (and dare we say, Foolish?) investor, opportunities abound.