As defined on Wikipedia, network neutrality (also net neutrality or Internet neutrality) is the principle that Internet service providers and governments should treat all data on the Internet equally, not discriminating or charging differentially by user, content, site, platform, application, type of attached equipment, and modes of communication.
Given that access to the Internet has become commonplace, most of our activities are happening over the Internet. While the Internet started as a carrier for email (textual data), these days, it carries voice and video and incidentally textual data. This development is causing heart burn for the established players, who earlier had subscriber based services for voice and media.
As these players have been mostly reduced to carriers of data packets, they have resorted to practices that discriminate between data packets. For example, if a company offers long distance calling over VOIP, that company will try and block data packets for services like Yahoo Chat, Google Voice and Skype. Similarly, for players who offer media streaming services of their own, will block of delay data packets for services like NetFlix and others.
By the principle of net neutrality, the providers who are providing connectivity to their customers should not discriminate between services. Hence, they should not block traffic from rival services.
Net neturality is a very important concept that forms the backbone of the Internet. While most countries do not officially have a net neutrality law, there should be one. This will ensure there is sufficient competition on the market and the consumers will truly benefit from the best services.