Every language has rules about what is or is not correct in the language. In human languages that takes many forms: words have a particular correct pronunciation (or range of pronunciations) and they can be combined in certain ways to make valid sentences (grammar). Similarly XML has two different notions of "correct". The first is merely that the markup is intelligible: the XML equivalent of "getting the pronunciation right". A document with intelligible markup is called a well-formed document. One important goal of XML was that these basic rules should be simple so that they could be strictly adhered to.
The XML equivalent of "using the right words in the right place" is called validity and is related to the notion of document types. A document is valid if it declares conformance to a DTD in a document type declaration and actually conforms to that DTD.
A document could also (or exclusively) be identified as conforming to a schema. If it actually does conform, it is said to be schema valid (commonly shortened to "valid").
