User Acceptance Testing or UAT for short, assesses whether the product or service is acceptable to use by the customer and works as they expect.
This phase will involve the product or service being used, as how a typical customer would use the product or service and determining whether the customer finds the product or service acceptable.
Example 1, a customer visits a car showroom and as part of their 'User Acceptance Testing', they take the car for a test drive.
Example 2, a mobile phone manufacturer, conducts a series of User Acceptance Tests, to see if the phone can be used to make calls, send messages and access the internet in the way a typical user would be accustomed to.
The phone manufacturer would not necessarily have to do this, but it could be seen as a prudent move, as users may not like the way the mobile phone must be used, ultimately affecting sales.
Again, it's important to appreciate that this is not a functional test but merely a test to prove the phone is capable of being used for a series of common uses, as would be expected by a typical phone user.
User Acceptance Testing assesses whether a product or service is acceptable for use by the customer.
User Acceptance Testing is not a full on functional test but a test based on commonly used functionality