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.
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."
Welcome and I hope you find learning here as easy and enjoyable as I do. Advice. If you think something is not correct writing it here will not help. Except for some commiseration from other learners. What you should do is Report it. On the page where you had the sentence there is a Report Problem button. Left bottom. Here is a good site since you seem to be new here. http://www.duolingo.com/comment/1352379
If you have any other questions or problems of course come to the comment page someone will always try to help.