A system designed to give power to all four wheels of the vehicle to give it traction in adverse conditions (such as in a blizzard, or off road).
A common misconception is that a 4x4, loud, large and guzzles gas, this is not true. There have been vehicles in the history of 4x4s that are tiny, like the Suzuki Samurai.
Some urbanized areas will have 4x4 vehicles that are never actually used in the conditions that they were designed for.
The first practical 4x4 vehicle was the Willy's Jeep, created by the United States in World War 2. It was powered by a Ford flathead inline four engine. Later variations, like the Land Rover soon followed in it's path, sharing it's chassis.
Without Willy's Overland, Ford and the need for a smaller, faster all wheel driven vehicle, the 4x4 would not have been built in a manner that small vehicles can use it.
Some 4x4 buyers use them in constant off road conditions, while other 4x4 buyers choose not to take their investment into conditions where it can get heavily damaged and/or tottaled.