a descendent of Muhammad, refering to his household. Since Fatima is the only child of Muhammad who survived him, and the only one who had children herself, the term refers to the descendents of Fatima and Ali, the 4th caliph.
Great honor is given to these people in all Islamic communities.
The title Sayyid is passed on from a man to his sons and daughters, so that there are male and female Sayyids. However, a woman cannot pass this title on to her children.
This is somewhat ironic, since there is no purely male line of descendency back to Muhammad, and the only way anyone can be a Sayyid is through the female link of Fatima.
This is one of many ways how men in the male-oriented and male-dominated system of Islam have secured privileges for themselves, even though by this rule, they couldn't legitimately own their own title.