A sales territory is the set of accounts, industries, or geographic region that one rep owns. It defines who you're allowed to sell to, and therefore what your quota is measured against. Territories are carved up by region, company size, industry, or product line — "the Northeast mid-market," for example. In outside sales a territory is physical and you travel it; in inside sales it's usually a named account list in the CRM. The territory is the box your career lives in for a while.
In plain English
Your territory is your patch. It is the set of prospects and accounts you can realistically own and work. A fair territory has enough accounts that fit the ICP to make a reasonable quota reachable. An unfair one sets you up to fail no matter how hard you grind. Territory quality is one of the biggest and least-discussed factors in whether a rep succeeds.
Why it matters to you
Before you accept a role, ask what your territory is and whether it can actually support the quota. A huge, vague territory is often a bad sign — it means no one carved it with care. As you build your pipeline, the territory is the raw material; prospecting well inside a good territory is how reps build a career, and a promoted rep often moves to a better one. Territory is where sales fairness lives or dies.
For running a book and territory as an AE, see Manage Your Territory.