Also called castor, superfine, or berry sugar. It is much finer than the regular granulated sugar . Its name comes from the fact that grains are small enough to fit though a sugar "caster" or sprinkler - kind of like a salt shaker.
Caster sugar is used in place of regular granulated sugar - for example in drinks or in baking - when the cook desires sugar that dissolves very quickly. Note that icing or confectioners' sugar is also very fine and dissolves quickly; however, icing sugar contains cornstarch to prevent it from clumpng. So don't substitute icing sugar for caster sugar, as it will yield rather different, often catastrophic, results.
If you don't happen to have caster sugar on hand, you could sieve it. However, it's easier just to pulse regular granulated sugar in a food processor or blender for a minute or so. Just note that it also gives rise to sugar dust, so let it sit for a minute before opening the lid.