An integral field unit (IFU) is an instrument that allows a "normal" spectrograph, i.e., with a slit opening, to capture data across a two-dimensional field. The combined instrument is called an integral field spectrograph.
A typical spectrograph collects data from a line through an image (one dimension) and offers spectral data over one spatial dimension. The integral field unit rearranges points of light so that the slit includes data across a two-dimensional area, but at a relatively low spatial resolution. Spectrographs are often built so they can be used with or without the integral field unit.
An image slicer directs light from different parts of the image into a slit such that parts of the image across two dimensions are all fed through the one dimension of the slit width. UVES of the ESO VLT does this.
A lenslet array has a lens for each pixel. SAURON of the William Herschel Telescope (WHT) uses this.
Fibers uses optical fibers to direct the image into a single slit. INTEGRAL, another IFU for WHT, uses this.
The phrase IFU observation naturally refers to a spectrographic observation using an IFU.