The word Cosplay is used to define a particular type of costume worn by a rising sub-culture of video game and anime enthusiasts. The word itself is simply a combination of the words "costume" and "play". Cosplayers dress up like their favorite characters, often playing the part by acting out populars scenes for the character and expressing the same mannerisms. The characters portrayed range from video games like Devil May Cry to anime and manga like chobits.
Most cosplayers refer to themselves as "otaku" a japanese word for someone who is obsessive about anime and manga.
Cosplayers tend to dress up only at anime conventions which are held all over the world. In Japan, some cosplayers are known to wear the clothes anywhere from street corners to malls and restaurants.
Currently, the most popular cosplay out there are Naruto Cosplay, Bleach Cosplay & Final Fantasy Cosplay.
Many serious cosplayers start their own cosplay websites where they feature the various costumes they've made for other cosplayers to see and critique. One of the most popular cosplayers is Adella. She is a professional cosplay model that attends many conventions around the world. Many cosplayers strive to reach her level where they can make a living by doing their favorite thing in the world: Cosplaying!
Want more cosplay info? Check out the wikipedia cosplay article.