Unsupervised learning (UL) is a type of algorithm that learns patterns from untagged data. The hope is that through mimicry, the machine is forced to build a compact internal representation of its world. In contrast to Supervised Learning (SL) where data is tagged by a human, eg. as "car" or "fish" etc, UL exhibits self-organization that captures patterns as neuronal predelections or probability densities.
The other levels in the supervision spectrum are Reinforcement Learning where the machine is given only a numerical performance score as its guidance, and Semi-supervised learning where a smaller portion of the data is tagged. Two broad methods in UL are Neural Networks and Probabilistic Methods.