A place where some African American folk ususally claim they are from. They usually aspire to fantacies of escaping from "the hood" but most fail. However some actually do manage to escape from this 'hood' through their talents in the Rap and hip-hop industry.
The hood is also an area of heavy crime, and corrupt police force. Hoods are usually owned by organized crime organizations known as Street gangs. Which deal in the drug trade, prostitution, and theft.
Recently, hoods are becoming not only something of the African American race, but something of all races and cultures including hispanics, whites, etc, this hood-mentality has been spread through the increasing popularity of Rap and Hip-hop music, "gangster culture", and the underfunding of the police force allowed by the government.
The hood is a bad place, where you don't want to be, simple as that.