In Sales, any individual who might become your customer is termed as a Lead. Lead is also alternate term for a Prospect.
You may get Leads from multiple sources like the prospect filling your contact form on your website, prospect's enquiry or query email, individuals subscribing to your company newsletters, prospects you got from outbound sales efforts like Linkedin Sales navigator or Client Databases or via Industry conferences or meetups.
All the above prospects are initially termed as Leads. Once you get a lead, you add them to your CRM's Lead list. Post that, they go through your Lead qualification process, where your Sales Development representative contact them back.
The Sales Development representative have a quick discussion with the initial leads to understand the overview of their requirement, try to analyze if your company's offerings can solve the customer's key pain point. They also check if the Lead has the required budget to buy your products.
Related post on Blog: 4 Sales Lead Qualification questions to ask every Lead
Also you may read more about SCOTSMAN or BANT approach to Lead Qualification to learn more on this topic.
Once the SDR validates the Lead, they are categorized under different heads as "COLD Leads", "WARM Leads", "HOT Leads", etc if they are still yet to be closed. Once they are closed, they are either converted to Deals or Contacts or are Junked/archived by updating the status as "Unsubscribed" or "Deferred" or "Dis-qualified".