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Herbal extract is a liquid solution of herbs and alcohol. The dried or fresh herbs are combined with alcohol, then the solid matter is removed leaving only the oils of the herbs mixed with the alcohol. This process is called extraction, hence the name, herbal extract. For example an extract made from peppermint and alcohol would be called "peppermint extract."
Most commercially sold extracts have a herb to alcohol ratio printed on the label. When dry herbs were used to make the extract the ratio is commonly 1 part dried plant to 4 parts liquid, (alcohol and water). When fresh herbs are used the most common ratio is 1:1. This does not indicate the amount of that herb in the bottle, rather the ratio used in making the extract. Example: Dry herb strength: 1:4 means that the mixture used to produce the extract was 4 parts liquid, (alcohol and water) and one part dried plant. This is not the same as an ingredients list which is also present on most commercial extracts.
Herbal extracts are sold as dietary supplements and alternative medicine and commonly used for flavoring in baking and other cooking much like vanilla extract.