XML, or Extensible Markup Language began to become popular in 1997. It is like HTML in that it is a "markup language". A markup language is a language that identifies structures in a web document. For example, in Hypertext Markup Language, <a href=pirate.htm>Park Center Webpage<a> indicates that the object(in this case, the words Park Center Webpage) is defined as a hyperlink to the relative URL, pirate.htm. That set of tags was defined by the W3C and accepted by the browsers as the universal tags to define clickable text on a web page. That markup language, HTML, continues to be the backbone of the WWW. However, HTML has its limitations. It requires that at least 3 parties agree to the universal markup tags. If either the W3C, Netscape, or Microsoft do not support a given tag, it limits its usefulness to the webdesigner who wishes to be viewed by all users.
This frustration with browser compatibility led to a language called SGML, Standard Generalized Markup Language that was implemented by the ISO(International Standards Organization). The ISO is the organization that attempts to make life simpler for us all. They set standards for various things so that there is some consistency in the world. Therefore, for example, the standard size of copy paper worldwide is 81/2 X 11 inches. SGML was defined as the standard for "define on the go" markup language. What SGML, as well as XML, does is allow the creator to define their own tags within the document. HTML, on the other hand, is limited in that it allows you to use only certain predefined tags. SGML had little usefulness on the Web because it was cumbersome. SGML was created in the late 1980's before the WWW took off. XML is a simpler, less general, "define on the go" markup language that was much more suited for the low bandwidth of the Internet.
XML may be especially useful in specific industries that transport large amounts of data in routine ways. For example, the stockmarket may find XML to be a far better markup language than HTML because they can create tags that are specific to the financial industry that essentially become their "own markup language". XML should not be be confused with XHTML. XHTML is a form of HTML that uses existing html tags in strict compliance with W3C standards. The strict compliance is attained by making it an XML document. If you wish to explore XML in greater detail, I encourage you to view the following sites:
W3Schools is the best source for a simple explanation.
Basic Tags