A Ph.D. is the highest level of education that one can obtain in an academic discipline. The initials stand for “Doctor of Philosophy”, where ‘doctor’ comes form the original Latin root meaning teacher. The degree isn’t limited to what we would today call the field of Philosophy. The term ‘philosophy’ is used more generally here to refer to any academic discipline.
The original reason for creating a Ph.D. degree was to allow someone who obtained it the right to teach and do research at a University. Although this is still the primary reason for obtaining a Ph.D., the diversity and expertise required for many of todays career options can make a Ph.D. useful for attaining high level positions in non-University environments. This is especially so in careers related to science and to some extent, economics.
Another aspect of a Ph.D. that sets it apart from other academic degrees is that the person who is to obtain it must make an original contribution to the field. Thereby expanding the field’s body of knowledge. This can also be true for a Masters degree, but not to the same extent as a Ph.D.
Depending on the field, a Ph.D. can take anywhere from 3 to 6 years worth of research to complete. After this time a thesis must be written and the research results are often published in peer-reviewed journals. The thesis is also ‘defended’, which means that the candidate must present and convincingly argue the merit of their work to a panel of experts (usually University Professors). This panel, or committee, questions (and often challenges) the candidate, sometimes for hours, before deciding whether or not to grant the individual the degree. If they grant it, the committee essentially is saying, “you can now be one of us”.
As one’s level of knowledge in a field gets to the point where they enter a Ph.D. program, they tend to narrow their focus on a particular aspect of that field.
Lastly, I can’t resist repeating a humorous account of what all these letters for these degrees can mean. In the sciences you work your way up from a B.Sc. (bull shit), to an M.Sc. (more shit), to the Ph.D. (Pile it Higher and Deeper).