Plain English Meaning
It is the lid you unscrew to pour oil into the engine, with a measuring stick attached so you can check how much oil is in there.
Full Definition
A combined component on a piston aircraft engine that serves two functions: the cap seals the opening through which engine oil is added, and the dipstick attached to it is a marked metal rod used to measure the quantity of oil in the engine sump.
Context Anchor
Seen during preflight inspection when checking the engine oil level before starting the airplane.
Derivation
Dipstick comes from the simple action of dipping a stick into a liquid to measure its level. The name describes exactly what the tool does.
Why Pilots Care
Maintaining the correct oil level prevents engine damage from insufficient lubrication and cooling while confirming the system is sealed against leaks.