Chakra is Naruto's (anime series) answer to other roleplaying games' or shows' mana. The theory states that chakra is an energy that is created within the human body and released through tiny holes in your skin known as chakra holes that enables you to apply near-magic techniques into fighting, such as boosting your kicks and punches, improving movement speed, agility, and even manipulate the environments to create wind, energy thrusts, walk on vertical surfaces etc etc etc...
Naruto has an exceptionally high chakra production within his body in addition to being able to draw extra -special- chakra from a fox demon sealed within his body to perform special moves and fighting techniques.
Chakras are also, in Yoga and many new-age psychic circles, the energy points in the spirit/soul/energy body where different kinds of energy flow through. As one progresses from bottom to top, each chakra delves into theoretically more complex forms of thought and emotion.
There are seven, though some consider the eighth to be the aura or something along those lines. There can really be more or less, depending on how complex the mysticism makes it. I've seen three, and I've seen 20+ (usually any beyond 7 include 'lesser' chakras, energy conduits on the body that don't serve a function other than taking in and expelling psychic energy).
The third eye chakra is associated with the pineal gland.