In the United States, a "Census Designated Place" or "CDP", is an unincorporated area that the Census uses to track demographics in an area that is not an incorporated area.
As part of its constitutional mandate, the Census keeps track of the population of states, counties and cities. Keeping track of the population like this allows the federal government to disburse funding based on need. However, many people do not live inside of legally incorporated cities, instead living in communities that share the features of a town, while not being legally incorporated. The Census has created the CDPs to keep track of these. CDPs can range from small to large, and while all are supposed to be based around areas and features that would reflect popular understanding of an area, the Census' boundaries might not always match local perceptions of the area.
As someone with an interest in geography, and a habit of exploring, I often use the CDPs, as imprecise as they, to give me a better idea of the areas that I am visiting. The CDPs are a great tool for understanding the nature of the crossroads towns and exurban areas that are not legally incorporated.
The following text gives the Census' own definition of what a Census Designated Place is:
Census Designated Places (CDPs) are the statistical counterparts of incorporated places, and are delineated to provide data for settled concentrations of population that are identifiable by name but are not legally incorporated under the laws of the state in which they are located. The boundaries usually are defined in cooperation with local or tribal officials and generally updated prior to each decennial census. These boundaries, which usually coincide with visible features or the boundary of an adjacent incorporated place or another legal entity boundary, have no legal status, nor do these places have officials elected to serve traditional municipal functions. CDP boundaries may change from one decennial census to the next with changes in the settlement pattern; a CDP with the same name as in an earlier census does not necessarily have the same boundary. CDPs must be contained within a single state and may not extend into an incorporated place. There are no population size requirements for CDPs.