Source: The Image Group
Coated paper is paper that is coated with an agent, typically clay and in some cases pigments, which helps the paper look brighter and smoother. Essentially, coating fills in the tiny pores and gaps between the paper fibers, giving it a smooth surface. This minimizes the amount of ink absorbed into the paper and allows ink to print evenly on top of the coated surface, resulting in sharper and more detailed print.
Uncoated paper, on the other hand, does not contain any agent or pigments, meaning that there's nothing to fill in the gaps and pores in the paper fibers. Naturally, the lack of coating leaves the paper coarse and very absorbent. Because of this, ink printed on uncoated paper don't look as crisp and bright.