A broken link is a link that leads nowhere: a person clicks and lands on a 404 error page instead of the content they wanted. Broken links can be internal (to your own site) or external (to someone else's).
A person who hits a 404 instead of a product or article usually just leaves. The search engine also wastes its crawl budget on these pages and sees a site that is poorly maintained. Lots of broken links signal neglect.
A page was deleted or renamed but links to it stayed. An external site you linked to shut down. A typo in the address. Broken links pile up the older a site gets and the less often it is checked.
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