The rate at which the general price level of goods and services rises over time, which correspondingly erodes the purchasing power of a fixed amount of money.
A loaf of bread that cost a dollar decades ago costs several dollars today — not because bread got fancier, but because a dollar simply buys less than it used to. Inflation is that slow, steady erosion happening to every dollar sitting still. It's exactly why leaving a large pile of cash under the mattress for 30 years is quietly a losing strategy: the number stays the same, but what it can buy shrinks.
A FIRE plan built on today's expenses without adjusting for inflation would fall short decades into retirement, since prices keep rising the whole time. That's why safe withdrawal rate calculations (like the 4% rule) explicitly increase the withdrawal amount each year to keep pace with inflation, not just repeat the same dollar figure forever.