A pip (percentage in point) is the smallest price increment possible that a forex pair can make. Looking at GBP/USD again:
A movement up or down 0.0001 would be the minimum amount the pair can move (1 pip). However, not all currencies trade to four decimal places. Any pair with the Japanese yen as the quote standardly has a pip of 0.01 due to no decimalization of the currency.
Some brokers and exchanges break the standard and offer pairs that extend the number of decimal places. GBP/USD, for example, will go to five decimal places rather than the usual four. USD/JPY typically is two decimal places but can go to three. This extra decimal place is known as a pipette.