Animation is a film made up from individual pictures or frames which are then run in sequence to give the illusion that the objects or characters in it are moving. This could be done with pencil, pen, cut-outs, computer images or puppets using stop motion where the puppet or model is moved a little and photographed with each movement. The most basic animation is flip book where something is drawn in a position then on the next page it is drawn slightly moved from the original position. This continues through each page, moving the item gradually until it is complete. The pages are then flipped through giving the animation of the drawing.
An example of animation

As mentioned above another popular type of animation is stop motion or frame by frame where the animation is made up from photo stills of an object or model. A picture is taken then the model is moved very slightly then another picture is taken and so on. This is still used today in films such as Chicken Run and Wallace and Gromit.
Morph, a character from the 80's was animated using stop motion by the now hugely famous Aardman Animations.
Animation has now become a huge business in TV and film through it's development on computers. Almost all animation we see nowadays is developed on a computer using animation software of some sort. Stop animation obviously still has to be done by hand but the end result will still be compiled using software on a pc. The biggest breakthrough has been in the film industry where 3D animation has and is always getting more advanced making the end result more realistic. Many different textures can be imitated using 3D software including water or fur on an animal, which has become the most popular type of film choice.
There are plenty of different types of software that will give an impressive result to the home or business user. These work by sketching or drawing on screen then allowing you to animate the picture by using frames and key frames. Some packages can allow the user to animate from one drawing alone by manipulating the image. Impressive 3D animation is even achievable by using software such as Blender, a graphics animation and video production program. Blender allows you to construct characters or anything of a solid appearance by constructing mesh models then wrapping them with textures so they appear realistic.
Another software package Pencil, works by the traditional method of hand drawn animation using vector and bitmap on the computer monitor kind of like tracing paper. This is a much simpler form of animation, suitable for beginners or anyone who may be interested in animation.