An order book is a list of orders available to be matched maintained for each security trading through an order driven (matched bargain) system, or a hybrid system that has order driven features.
A typical order book consists of limit orders that do not match against each other, like this:
Given the order book above the security has a mid-price of 100.5, a bid price of 99 and an offer price of 102. Market orders would match immediately against what is available in the order book: for example, a market buy for 20,000 would match against the two cheapest sells: i.e. 15,000 at 102 and 5,000 at 105.
Similarly a limit sell for 5,000 at 98 would match immediately against what is available at 99p, the price at which it matches being determined by market rules. A limit sell at 100 would be added to the order book to await an order that matches it.