Alternate Reality Games use fictional versions of real world media - for instance, real-seeming websites for fictional companies or emails from story characters - to create a narrative that a player can take a role in.
Gameplay usually consists of puzzles in the game world that, once solved, progress the narrative. ARGs are spread over multiple locations both online and, sometimes, in the real world and use many different types of media.
They are usually played out in real time, with members of the development team taking the parts of game characters when interacting with the players, and many puzzles are intended to be solved collaboratively.
A player begins an ARG through a 'rabbit hole' - a piece of media from the world of the ARG with links that lead the player to other elements of game.Wikipedia Article on Alternate Reality Games