SegWit is the process by which the block size limit on a blockchain is increased by removing signature data from Bitcoin transactions. When certain parts of a transaction are removed, this frees up space or capacity to add more transactions to the chain.

Segregate means to separate, and Witnesses are the transaction signatures. Hence, Segregated Witness in short, means to separate transaction signatures.

The concept of SegWit was formulated by Dr. Pieter Wuille.

https://steemit.com/bitcoin/@jomeszaros/what-counts-as-a-segwit-transaction