Orthogonal Frequency Division Multiplexing (OFDM) is a method of encoding digital data multiplexed carrier frequencies. It belongs to Multi-Carrier Modulations (MCM). In other words, it is a modulation with more frequency carriers.
OFDM channels are orthogonal. Then, the spectral distribution of each channel do not interfere with each other, even if they seemingly overlap (orthogonal components cannot be added).
A large number of closely spaced orthogonal sub-carrier signals are used to carry data on several parallel data streams or channels. Each sub-carrier is modulated using a conventional modulation method (e.g. PSK or QAM) at a low symbol rate, similar to single-carrier modulation.
Source data are additionally encoded by a convolution code to increase errorless reception. OFDM is implemented by a DSP.