When your security alarm system is installed, your home is divided into “zones.” A zone is simply an area of your home, which is alarmed by a variety of devices. For example, your kitchen may have alarm contacts on several windows and a glass breakage detector mounted on the ceiling. All of these devices are then tied to the control panel as “zone 3”. If an alarm sounds, your control panel, or keypad, will indicate which zone has been activated.
This is simply a way of seperating the devices (motion sensor, door sensor, etc.) that are attached to your alarm panel. If your front door is attached to zone 1 for example, every time that door is opened the "zone 1" light on the keypad will light up. In addition, if your alarm is set off by "zone 1", the monitoring station will know it was the front door that caused the alarm. Some alarm companies will combine devices on one zone (eg a door and motion sensor in the same room) if they run out of zones to attach devices to. While this is not recommended, it is pretty standard practice in the industry. Most alarm panels start with 6-8 zones, but some can be expanded. See "expand, expandable, expansion module" for more details.