In linguistics, IP stands for "Inflectional Phrase", in other words, a sentence.

In the mid-level Chomskyan theory known as "X-bar syntax", which has since come to be disfavoured/replaced by more current syntax theories such as minimalism, it was believed that any syntactical group had a number of features in common. An "XP" or "X-phrase" was the shorthand used to refer to such groups in general, using the common mathematics/science practice of "X" representing an unspecified or unknown quantity/factor/etc. This could be specified in ways such as "NP" (noun phrase), "VP" (verb phrase), etc.

As stated, any XP had a number of features in common, including a hierarchical structure, and of course, a root. The root of XP was always an X, and the root was the only totally necessary component of an XP. (For example, the root of an NP, a noun phrase, is of course a noun! Examples of NPs include "John" and "the tall man with auburn hair"... these show the varying levels of inclusion within a possible XP. A noun phrase such as "John" contains only the root, a proper noun, whereas a noun phrase such as "the tall man with auburn hair" contains a root noun, "man", a determiner, "the", an adjective {actually, an AP {{afjectival phrase}} "tall"}, and an adjunct PP (prepositional phrase) "with auburn hair" which itself includes another noun phrase, "auburn hair". This exemplifies the possible complexities and hierarchy that an XP can have.})

The following tree diagram shows the "basic" format of any XP. X' is called "X-bar" by the way, and is the source of the name of the theory:

      
             XP
             /\
            /  \
           /    \
          /      \
         /        \
        Det       X'
    (determiner)  /\
                 /  \
                /    \
               /      \
               X     Complement
             (root)

The problem with X-bar syntax theory, then, became, what kind of XP is a sentence, exactly? A sentence in its simplest form includes at least a noun and a verb, or more acurately, a noun phrase and a verb phrase. Can an NP+VP combination be seen in and of itself to be some sort of XP? But if so, what is the root X of such an XP?

The solution to this problem was arrived at in theorizing that a sentence is itself a type of XP... an IP, or inflectional phrase. According to this theory, the root of an IP is the inflectional information that "maps on" to the verb... this information is "hidden" (or located in the "deep structure", to use the technical parlance) and only manifests on the verb in the "surface structure".

So, within X-bar theory, a simple sentence such as "John saw the sunset", can be seen as an IP with a hierarchical structure along these lines:
{IP{NPJohn} {I' {I (inflectional information: past tense, third person, singular)} {VPsee {NPthe sunset}}}}

In a slightly more clear tree diagram format:

                  IP
                  /\
                 /  \
                /    \
               /      \
              /        \
             NP        I'
              |        /\
           John       /  \
                     /    \
                    /      \
                   I       VP
                 (past,    /\
                  3rd,    /  \
                  sg.)   /    \
                        /      \
                       /        \
                       V        NP
                       |        |
                      see    the sunset