A Stream Cipher is a type of encryption algorithm that operates on individual elements in a data stream, such as a character or a binary digit. They are less complex to implement in hardware, and are suited for areas that have little to no buffering, such as telecommunications. There is not a lot of literature about these ciphers; most designs are proprietary.
They can be either synchronous or self-synchrononizing.
Source: The Handbook of Applied Cryptography, Alfred J. Menezes, Paul C. van Oorschot, and Scott A Vanstone