Plain English Meaning
Instead of the FAA writing all the rules and certifying every Light Sport Aircraft itself, a group of aviation experts and industry members wrote a shared set of rules. Manufacturers build to those rules, declare their aircraft meets them, and the FAA accepts that as good enough.
Full Definition
An industry-developed set of design, manufacturing, performance, and continued-airworthiness standards for Light Sport Aircraft, agreed upon by aviation industry stakeholders and accepted by the FAA in place of traditional FAA type-certification. Manufacturers self-certify that an LSA meets these standards, and the FAA recognizes that compliance as the basis for airworthiness.
Context Anchor
Seen when reading about how light-sport aircraft are approved, built, maintained, and kept eligible to fly.