Definition
An IP leak is the umbrella term for the failures that defeat a VPN's main job. The common causes are WebRTC in the browser, IPv6 traffic that skips an IPv4-only tunnel, a tunnel that drops without a kill switch, and apps that are excluded by split tunnelling.
How it works
You can check by noting your real IP with the VPN off, connecting, then visiting an IP and leak test page. If the real address or your ISP's name appears anywhere, something is leaking. Torrent clients can leak too, which is why some people test with a 'torrent IP check' magnet link.
Why it matters
A leak exposes your approximate location and your ISP to the site or swarm you are using. Fixes are usually simple: turn on the kill switch, disable or tunnel IPv6, block WebRTC leaks in the browser, and review split-tunnelling rules.