A niche is something (Some topic ) which you can write pages about in web terminology. It has different meanings in diff contexts. For Example My fav Niche is "Java Programming" and all my sites are Java Related. Choosing the right niche is one of the most critical step in web building ..
:::Niche::: 1. a place or position suitable or appropriate for a person or thing: to find one's niche in the business world. 2. a distinct segment of a market. 3. pertaining to or intended for a market niche; having specific appeal: niche advertising.
a niche is usually a subset of a larger domain - for example, you can have a site about birds (broad), or specifically about ducks (narrower) and narrower still, about Pekin ducks. the narrower the niche, the easier it is to rank higher.