Peer reviewed or refereed means that articles submitted to a journal are examined both by the editor and one or more specialists in the field (the author's peers) before being approved for publication. Peer review helps to ensure published articles represent quality scholarship.
By looking closely at the journal issue, you can often tell if a journal is peer reviewed. In the front or the back of the issue it will often list an editorial board and give guidelines for article contributions that will tell you if it is a refereed journal.
If you don’t have the actual journal in hand, it may be more difficult to determine if a journal is a scholarly publication (or peer reviewed). Some of the databases offer you the ability to limit by “Scholarly (Peer Reviewed) Journals" or "Academic Journals." Also, most journals published by associations use some sort of peer review process.
Peer-Review in Three Minutes
This three minute video describes and discusses the importance of peer-review and its process.
(NCSU video, 3:15 minutes)