Colloquially, racism means prejudice based on the perception of someone's "race" (ie: ancestry, physical characteristics such as skin tone).

That covers things like assuming a black man knows about gangs and rap based only on their skin color.

There's also the institutional level where individuals might not really think or feel anything about race, but it still is a factor. Stuff like closing polling places in predominantly black neighborhoods, or individual police officers who are given a quota and only assigned to black neighborhoods. Housing in the US has a long history intersecting with the idea of race. "The Color of Law" was a pretty good read on it.

Wikipedia puts it nicely:

Racism can also be said to describe a condition in society in which a dominant racial group benefits from the oppression of others, whether that group wants such benefits or not.