According to the Merriam-Webster dictionary, Ghee is  a semi-fluid clarified butter made especially in India (1). Ghee contains fewer dairy proteins than regular butter and could be a better option for people sensitive to lactose and casein. 

Ghee also has a nutty flavor, which makes it a great cooking companion for rice and enriched baked goods, and many other dishes. Ghee has a higher smoking point, which makes it great for sauteing or frying at a higher temperature.

Ayurvedic advocates use Ghee for massage and to make herbal ointments to treat rashes and burns.

You can buy Ghee in a supermarket or attempt to make your own. You start with melting sweet cream or unsalted butter and bring it to the simmering temperature. Butter separates into milk solids, which you want to remove from it, and liquid fat. The milk solids gather on the surface and you can easily skim them with a spoon. 

I used about 1 and a half pounds of sweet cream butter to make these 2 jars of Ghee. You can see how much milk solids I had.

Continue to cook the butter until all the leftover milk solids have sunk to the bottom, leaving the liquid clear. Simmer for a few more minutes until the milk solids at the bottom of the pan turn brown, giving the ghee its flavor and color. 

Pour it into the glass jar of your choice through a sieve to make sure you caught all the milk solids which your spoon missed. Let it cool to solidify.