Outside of Japan, hentai (変態 or へんたい; listen English: ; lit. "pervert") is anime and manga pornography. In the Japanese language, however, "hentai" is not a genre of media but any type of perverse or bizarre sexual desire or act. For example, outside of Japan a work depicting lesbian sex might be described as "yuri hentai", but in Japan it would just be described as "yuri".
The word is short for hentai seiyoku (変態性欲), a perverse sexual desire. The original meaning of hentai in the Japanese language is a transformation or metamorphosis. The implication of perversion or paraphilia was derived from there. Both meanings can be distinguished in context easily.