Audio is the representation of sound as an electrical voltage (analog) or a stream of numbers (digital). The audio chain: sound waves → microphone (transducer) → electrical signal → preamp → ADC → digital audio → DAC → amplifier → speakers → sound waves.
The term 'audio' is distinct from 'sound' — sound is the physical phenomenon (pressure waves in air), while audio is its electrical or digital representation. High-quality audio preserves the original sound with minimal degradation.