The United States Association of Fringe Festivals does a darn good job explaining just that. I'm not going to reinvent the schpeal.
"Very generally speaking, Fringes are...
- Focused on the performing arts: Theater, dance, puppetry, spoken word and the like make up the Fringe core, but festivals often may include film and visual arts elements. Fringes don't have a focus on a single discipline or genre, but are a performing-arts smörgåsbord
- Uncensored: No one gets too fussy about swears or nudity but squeaky-clean content isn't marginal or discouraged, either
- Easy to participate in: Ticket prices are low for audiences and production fees are low for artists. Show selection varies from festival to festival but is generally quite open to participation by the gamut of amateurs to professionals
- Festivals: They last from just a few days to a few weeks and involve boatloads of people at multiple venues
- Original: Fringes feature a huge array of original material—sometimes by design, but usually because that’s what Fringes naturally do well
- Rapid-fire: Typically, tech is minimal and time is a factor at our festivals. Shows are often kept brief (Fringes most frequently have shows right around 60 minutes in length) and technical requirements kept simple (minor sets, streamlined cues, nothing elaborate)
...In the United States, no one organization or individual owns, controls or regulates the name “Fringe.” ...There are no national rules for how each individual festivals operate; the festivals’ content, finances and structure vary from city to city. Generally, however, all the festivals are committed to an open forum of expression that minimizes the financial risks for both artists and audiences. Fringes strive to keep application fees and ticket prices low so that more people can participate in our festivals."