Domain parking is the practice of purchasing a domain without the immediate intention of using the domain for email or a website.
Domain parking usually is done in order to reserve a domain name or to speculate on future resale of the domain at an inflated price. Domain parking may also be used as a placeholder for an existing web site. In this case, the owner of the domain may redirect the domain to another active site that he / she owns. In this case, the domain isn't technically parked as it is active.
A similar case is where the domain is minimally developed and is used for advertising (usually of products that relate to the words in the domain name). In thi case, the domain owner will aim to generate revenue through pay-per-click advertising.
Google are able to identify parked domains through their search algorithms. As these domains are considered not to contain valuable content, these are largely ignored by the algorithm. Consequently, the use of parked domains as a means of enhancing Google ranking is of limited value.