It's an aromatic spice powder made from ground dried sweet bell pepper pods.
Paprika fittingly gets its name from the Latin word for "pepper." Asking for "paprika" in Holland and some other European countries may lead you to the produce aisle, where the word is used as a synonym for red, green, or yellow bell peppers.
Ranging in color from bright red to brown, paprika is used to add color and flavor to rice dishes, soups, sausages such as Spanish chorizo, and stews, including Hungarian goulash or chicken paprikash. Paprika comes in both sweet and hot varieties. But unlike cayenne, whose bright red color signals its pungency, brown paprika is the hottest.
Today, paprika is used widely in dishes throughout Europe and is produced primarily in Spain, South America, California and Hungary. But Hungarians are considered the masters of the spice, producing six varieties. Spanish smoked paprika is particularly in fashion at the moment, but you can also toast paprika for a few minutes in a dry pan to bring out the flavor (be careful as paprika's high sugar content means it burns easily) or combine paprika with cumin for a similar result. Paprika can also be mixed with oil and brushed onto chicken or pork before roasting or grilling to add color. Be sure to store paprika in a dark, dry place and don't let it linger on the shelf too long, as its delicate scent and flavor will fade.
Recipe: Braised Red Cabbage With Smoked Paprika And Sweet Onions (Cookthink)
Recipe: Chicken Paprikash (Cookthink)