"An interpreter (or terp, for short) is a program which reads a story file and presents the game contained inside that file to the player. The interpreter itself is not part of the game, although it may provide shortcuts to make the playing more convenient. Many interpreters allow the player to enter commands (i.e., LOOK or GO NORTH) by pressing a single key combination (a "hotkey"). In addition, some interpreters allow the player to tweak display options to his liking (i.e., fonts and colors).
"The interpreter's function in interactive fiction is akin to that of a movie projector in motion pictures. It translates the 'raw material' of the work into a more palatable format for humans."
From IFWiki. Read more about interpreters here: http://www.ifwiki.org/index.php/Interpreter