Functions that oscillate over time are often called waves. If the function is such that it oscillates only in a localized region and goes to zero outside the region it may be called a wavelet. Thus we say wavelets are localized waves.
The fundamental role of the wavelet transform is to facilitate the analysis of signals or images according to scale. Wavelets are functions with some special mathematical properties that serve as a tool for efficiently dividing data into a sequence of frequency components without losing all information about position.