The direct answer
UGC, or user-generated content, is content created by real customers or users of a product, rather than by the brand’s own team. A customer’s unboxing video, a review posted publicly, a photo someone shared using a product: all of it counts, whether or not the brand asked for it.
Why it tends to perform differently than brand-made content
UGC carries a kind of credibility a brand's own content structurally can't. An outside person saying something positive reads as more trustworthy than the same claim made by the company selling the thing. That is why UGC gets treated as a distinct category rather than another content source.
Encouraging it versus manufacturing it
Asking real customers to share their experience, or lowering the effort it takes for them to do so, is a legitimate way to encourage UGC. Presenting paid or scripted content as if it were unprompted customer content is a different thing entirely. The gap between the two is obvious to an audience once noticed, and it damages trust far more than having less UGC would have.