Iodized salt is a form of table salt which has had iodine added to it to prevent a disease called goiter.
Goiter is characterized by the swelling of the thyroid gland due to iodine deficiency. Iodine is a nutrient that usually occurs naturally in vegetables, which absorb it through the soil in which they grow. But a diet consisting of food grown in soil that lacks iodine can cause an iodine deficiency, leading to goiter.
The practice of adding iodine to salt in the United States began in the 1920s as a way to combat goiter. Salt was chosen as the medium because it's affordable and everyone uses it.
What about iodized sea salt? Most commercial salt is made from rock salt that comes from underground salt mines. But sea salt, which is harvested by evaporating pools of seawater, is an increasingly popular type of salt. Chemically, sea salt and rock salt are the same, and iodine doesn't occur naturally in either one. Some manufacturers add iodine to sea salt, just as they do for ordinary iodized salt. Just check the label to be sure.
See Also: Kosher Salt
Alternate Spellings: Iodised Salt (British English)