Most commonly a WiFi radio will operate in one of three modes: Master, Managed, or Monitor. Additional possible modes (including ad-hoc, mesh, peer-to-peer, and repeater) and are both less common and outside the scope of this quick guide.
An Access Point (or simply AP) will operate in Master Mode while client devices operate in Managed Mode. Monitor mode, sometimes called RFMON for Radio Frequency MONitor, is a special mode that allows the radio to passively monitor all traffic in the given area, and requires special support in the drivers and firmware of the wireless device.
Keep in mind that not all radios have each of these capabilities and some radios have drivers that can only operate in one mode at a time.