A tiny idealized magnet! It is a very good model if you have a small strong magnet interacting with objects that are far away, notably other magnetic dipoles or a constant magnetic field.
The cool thing about this model is that we have simple explicit formulas for the magnetic field it produces, and for how this little magnet is affected by a magnetic field or by another magnetic dipole.
The intuition for the name is likely that "dipole" means "both poles are on the same spot".