According to the Cambridge Dictionary, fake news refers to "false stories that appear to be news, spread on the internet or using other media, usually created to influence political views or as a joke" (http://dictionary.cambridge.org/us/dictionary/english/fake-news).
Check out the video below from FactCheck.org to learn about ways you can evaluate news stories and determine their veracity.
Fake news is composed of fabricated stories created and disseminated to intentionally fool people into thinking they are real news stories. Here are some of their characteristics:
1) Sensational - intentionally designed to grab the attention of readers with a shocking or salacious headline (clickbait). Example: "FBI Agent Suspected in Hillary Email Leaks Found Dead in Apparent Murder-Suicide".
2) Uses an official sounding web domain made to look like a real news website. Example: Denverguardian.com.
3) Targets social media for spreading the fake news story. The story above was shared via Facebook over half a million times. Fake news purveyors also use fake Twitter accounts (bots) to retweet fake news stories at a rapid pace.
4)Targets ideological "echo chambers" or "filter bubbles". This means the news is directed at individuals that fake news purveyors believe are most likely to be duped by the story and apt to spread it via social media. The fake item is designed to fit a certain confirmation bias.
5) Uses disinformation for a specific political motivation or agenda. The source can either be a competing political party or a foreign power.
6) Can also be designed to make financial gains through advertising revenue (e.g. from Google Ads). The main purpose in this case is to drive a high volume of traffic to the fake news site in order to attract advertisers, who will pay based on being able to advertise to millions of viewers of the fake news item.