"Open jaw" is very much a common travel industry term, and in fact you'll find it specifically mentioned in the fare rules for many fares. Any travel agent you talk to will also be familiar with this term.
There's three different types of "open jaw" itineraries.
The first is where your trip starts and ends at the same airport, but the destination on the outbound is different to the start of the return. eg, SFO-JFK, IAD-SFO would be an example of this - the start and end is SFO for both legs, but the return starts from a different location to the initial destination.
The second type of open-jaw is when your trip starts at a different airport to where it ends, but via a single destination. eg, SFO-JFK-LAX
The third type is a combination of both of the above. eg, SFO-JFK, followed by IAD-LAX. This is referred to as a "Double Open Jaw", as in effect there's an open jaw on both ends of the trip.
The rules for open-jaws vary between airlines and even between specific fares. Normally the rule is that the "non flown" part of the journey has to be shorter than BOTH of the flown sectors. eg, given SFO-JFK-LAX, the non flown part of the journey is LAX-SFO.
eg, SFO-STL (1735 miles) and ORD-SFO (1846 miles) is a valid open jaw as the distance between the two cities is 258 miles, which is less than both of the flown legs.
SFO-LAS (414 miles) and DEN-SFO (967 miles) is NOT a valid open jaw routing, as the distance between LAS and DEN is 628 miles, which is greater than one of the flown legs.
Recently I've seen a few fares where the rules were that the non-flown sector had to be shorter than the LONGEST of the flown journeys. eg, the following is from the fares rules for a United Airline international flight :
FARES MAY BE COMBINED ON A HALF ROUND TRIP BASIS
-TO FORM SINGLE OR DOUBLE OPEN JAWS.
MILEAGE OF THE OPEN SEGMENT MUST BE EQUAL/LESS THAN
MILEAGE OF THE LONGEST FLOWN FARE COMPONENT.
To understand why open-jaw matters, you need to understand a little of how airlines price flights.
Many airlines will price fares differently for one-way v's return journeys, with return trips generally being far cheaper than two one-way trips. This isn't always the case - especially for domestic flights - but for international flights it's extremely common.
Without a concept of open-jaw, a trip like SFO-SIN, BKK-SFO would have to be booked as two one-way trips, which would increase the price significantly. Booking as an open-jaw allows this to be priced as a much cheaper return trip.