The information and storage that the blockchain system holds. This term is derived from the State Machine model, one of the Blockchain Models.
The state of the blockchain is the main storage primitive of blockchains. It is utmost secure and Trustless (meaning that we have access to its entire history as well), and calculating it essentially the outcome of the Consensus Algorithm of the blockchain. The entire history of this state is kept and is always auditable, and re-calculate-able.
The blockchain state is essentially where the contentious information is kept.
It is not to be mistaken with Storage, which is a discussion around non-consensus storage primitives that can be be used the blockchain state for broader Web3 applications.