A foul tip is a batted ball that goes sharply and directly to the catcher's hand or glove and is legally caught. A foul tip is considered equivalent to a ball in which the batter swings and misses, in that the baserunners are able to advance at their own risk (without needing to tag up). Should the batter produce a foul tip after previously accruing two strikes, the foul tip is considered strike three and the batter is out.
The term "foul tip" is commonly used to describe any pitch that is slightly struck into foul territory, but the ball must be caught by the catcher in order for it to be considered a foul tip by rule. If the ball is not caught by the catcher, it is considered a regular foul ball and the baserunners are not able to advance.
Watch: Jacob deGrom gets his 200th strikeout of the 2015 season on a foul tip by Trea Turner.