Ambient occlusion is a rendering technique that is based on the assumption that a surface receives uniform illumination from all directions. Some surface positions will receive less light than others due to objects nearby that occlude some of the light. If a surface point has a lot of local geometry nearby, some of this ambient illumination will be blocked causing the point to be darker.
An example of this is shown in the following image (generated using Blender):
This image is rendered using ambient occlusion only, without light sources. Note how the result looks like shadows in areas that have local geometry ...
