I've seen woodworkers refer to "green wood." I am new in wood working and trying to do something by myself. What does this term refer to?
"Green wood" is wood that has been recently cut/harvested and is not yet "dry". Well aged wood will have a moisture content in equilibrium with its environment, assuming it's had enough time to equilibrate and the environment humidity is not fluctuating too wildly.
As the humidity in the environment change, the wood will absorb or release moisture to equilibrate. In doing so it will expand or contract. Depending on the type of wood, the grain orientation and the finish, that may result in uneven shape changes, the wood may warp to varing degrees.
Green wood is an extreme of this in that it contains the water that was present in the cells from the processes of life. The loss of this water as the wood dries is generally far larger than the typical changes in "seasoned wood". When you walk through your local lumber yard you will see many examples of warped, say, 2 x 4s. These typically were milled when the wood was green, the warpage came about as the wood dried.
Ideally wood would be cut and allowed to air dry before it is milled. A somewhat less optimal procedure is to force dry wood in giant "ovens", kilns. When you see wood labeled KD, that wood has been kiln dried.
Generally, for nicer work, you should look for KD wood. Because it has lost that bulk of water used to sustain it when alive, you will be able to pick boards that have not significantly warped during this greatest period of change. The KD wood will cost more than green lumber due to the drying process.
If you're doing very demanding work, such a making musical instruments, you will want to use well aged wood that has been allowed to air dry under appropriate conditions.
The above definition, sounds very good to me. "Green wood" is wood that has been recently cut/harvested and is not yet "dry".
bpedit also suggests correctly that wood is best allowed to dry to an appropriate level for optimal results from milling.
However, I would add this proviso.
If you are interested in some types of hand tool woodworking such as spoon carving or whittling objects it is much easier to cut the wood while it is green and dry it later.
Other types of woodworking like bowl turning or perhaps using a draw-knife or spoke-shave to cut spindles for a Windsor chair are often cut to shape while green and finished later after the wood is stabilized in a dryer state.