From Latin: co- "together" , -linearis "belonging to a line,"

Definition: A set of points that lie in a straight line

Try this
Move any of the points around with the mouse. The others will move by themselves so they all remain collinear.

Obviously two points are always collinear, since a straight line can always be drawn through two points.
Sometimes it is spelled 'colinear' (with one L).

Word Usage

We say that "point Q is collinear with points P, R and S". Or put another way, "the points P, Q, R and S are collinear".

It's a similar idea to coplanar

Just as collinear points all lie on a straight line, in the three dimensional world,
when a set of points all lie on the same plane, they are called coplanar.
For more see Coplanar points.