A source is a filter-like program that requires no input; its output is controlled only by startup conditions. The paradigmatic example would be ls(1), the Unix directory lister. Other classic examples include who(1) and ps(1).
Under Unix, report generators like ls(1), ps(1), and who(1) tend strongly to obey the source pattern, so their output can be filtered with standard tools.
The term ‘source’ is, as Doug McIlroy noted, very traditional. It is less common than it might be because ‘source’ has other important meanings.