Digital literacy is the ability to understand how to use technology appropriately, as well as being educated on digital trends (memes, gifs, acronyms, etc.)
Examples:

The current generation is well educated in digital literacy.

"Do you know what a gif is?" "Of course, I’m digitally literate"
by GetGiffy January 22, 2015
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the understanding of pictures, videos, gif, etc on social media and the internet
by giftastic January 28, 2015
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The "digital literacy corps" is an initiative to increase digital inclusion, reduce the digital divide, and to increase broadband adoption via the use of teams of volunteers to work with population groups that have lower broadband adoption rates, teaching them "digital literacy."
In 2003, Net Literacy's team of student volunteers created a digital literacy corps that helped teach senior citizens, the disabled, and families with lower incomes, among others, how to use a computer and the Internet and identify their own personal broadband value propositon to help increase broadband adoption rates.
by MsSage December 6, 2009
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