The term drop rate is a general PC RPG term for the chance a monster will drop a given item.
This particular term comes from games where a monster has a set percentage to drop specific items, and usually have a loot list. For quest items, the rate is usually fairly high, such as 50/100%, while powerful items either have an extremely low chance (or none) for normal monsters. Bosses usually have higher chance to drop god items, and will in many case drop at least one high quality item, even if that's not the item you are looking for.
This is also the source of boss runs.