This term is used to describe programs that might have undesirable effects on a computer.
This includes adware, pornware, riskware and other programs that interfere with the normal working of the computer.
In contrast to malware, which is installed without knowledge or consent, potentially unwanted programs (PUPs) are installed with the consent of the person whose computer it is.
However, this might be tacit consent.
For example, a potentially unwanted program might be bundled with a free program, or its full functionality might go unnoticed in a large EULA (End User Licence Agreement).
Since such programs are, strictly-speaking, installed with permission, they can not be identified as malware.