Short for 'primative' in the online virtual reality software, 'Second Life'. It is the basic building block by which all in world objects are made. Each prim can be shaped, textured, animated, and stacked with other prims to create complex virtual objects. They can also have a special script attached to cause the object to react to interactions from in-world avatars.
To start building your house, point on the ground and choose create, then choose the basic shape of your prim from the options in the edit window.
You may only have a limited number of prims in your 512 square meter area.