<communications, unit> /bawd/ (plural "baud") The unit in which the information carrying capacity or "signalling rate" of a communication channel is measured. One baud is one symbol (state-transition or level-transition) per second. This coincides with bits per second only for two-level modulation with no framing or stop bits.
A symbol is a unique state of the communication channel, distinguishable by the receiver from all other possible states. For example, it may be one of two voltage levels on a wire for a direct digital connection or it might be the phase or frequency of a carrier.
The term "baud" was originally a unit of telegraph signalling speed, set at one Morse code dot per second. Or, more generally, the reciprocal of the duration of the shortest signalling element. It was proposed at the International Telegraph Conference of 1927, and named after J.M.E. Baudot (1845-1903), the French engineer who constructed the first successful teleprinter.
Where data is transmitted as packets, e.g. characters, the actual "data rate" of a channel is
R D / Pwhere R is the "raw" rate in bits per second, D is the number of data bits in a packet and P is the total number of bits in a packet (including packet overhead).
The term "baud" causes much confusion and is usually best avoided. Use "bits per second" (bps), "bytes per second" or "characters per second" (cps) if that's what you mean.