This is a concept generally attributed to Carl von Clausewitz, although it should be observed that in Von Clausewitz's classic work "On War" the phrase "fog of war" does not appear.
The concept can defined as: "The sum of factors which reduce or impede situational certainty in war."
Basically, the fog of war is the sum of your own ignorance plus the enemy's deceptions. It is what makes most important decisions in war judgement calls.
Even in modern warfare, the fog of war is still strong: as the US Air Force found out in Vietnam, too much information (infoglut) is as bad as too little.
The cases of civilian aircrafts shot down because they had strayed out their routes can be interpreted in the light of the fog of war.

What Clausewitz said:

"imperfect knowledge of the situation . . .can bring military action to a standstill"

"Lastly, the great uncertainty of all data in War is a peculiar difficulty, because all action must, to a certain extent, be planned in a mere twilight, which in addition not unfrequently--like the effect of a fog or moonshine-- gives to things exaggerated dimensions and an unnatural appearance. "

("On War",Ch. II "On the theory of war")

Another interesting (if derivative) source is the US Marine Corps' basic military philosophical manual, "Warfighting".

All actions in war take place in an atmosphere of uncertainty- -the fog of war. Uncertainty prevades battle in the form of unknowns about the enemy, about the environment, and even about the friendly situation. While we try to reduce these unknowns by gathering information, we must realize we cannot eliminate them. The very nature of war makes absolute certainty impossible; all actions in war will be based on incomplete, inaccurate, or even contradictory information.