Describes a graphical user interface element
which is drawn in a lighter color
to represent an unavailable option
A well-designed GUI does not permit the user to place the system it represents in an inconsistent state, or to request a nonsensical action from the system. When some condition obtains that makes some of the interface's commands or options unavailable, the GUI draws their widgets in a way that distinguishes them from available commands and options.
For instance, on a Macintosh an application may be running but not have any document windows open. Because there are no documents open, it is not possible to save a current document. Therefore, the Save command in the File menu would not make any sense to select, and is greyed out. Literally, the word "Save" is printed in a medium grey clearly distinct from the black in which available commands are printed.
Most any interface element -- menus, menu items, buttons, and so forth -- can be greyed out if necessary. However, if an element can never become useful (for instance, if it represents an unimplemented command) it is probably better to leave the option out entirely so as not to frustrate or confuse the user.