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If you translated "il biscotto" as "the biscuit" and it marked you wrong, then next time it happens, click the little flag icon before you move on and report "My answer should be accepted."
It's short for "typographical error." It means you made a typing mistake, which is just your fingers accidentally hitting the wrong keys. People make a distinction between typos and other errors because when it's a typo, you know the right answer but you just typed it wrong. But other errors are mistakes of knowledge or understanding.