Also known as Point Spread.
A method used by bookmakers to make a seemingly one-sided event more attractive to bet on. Commonly used in Rugby and American football.
For example, if Italy is playing Scotland in a Six Nations match at Murrayfield, the Italians may be 'awarded' a 22 points start on the handicap by the bookmakers. If you felt that Italy had been underestimated and could win the match, or lose by less than 22 points, then you would back them on the handicap.
However if you felt sure that the Italians would win the match, you should simply back them on the match betting odds without a handicap. Although this means that you wouldn't get the 22 point start, it does mean that the price would be more attractive.