A panel data set contains observations on a number of units (e.g. subjects, objects) belonging to different clusters (panels) over time.
A simple example of panel data is the values of the gross annual income for each of 1000 households in New York City, 200 from each of the 5 boroughs collected for each of 10 years from 1991 to 2000. in this example, the boroughs are the clusters (panels).