A Lyot stop is a particular type of stop used within coronagraphs. A stop is optical element designed to limit which light rays pass through an optical instrument such as a telescope or camera, typically a wall with a circular opening/window through which the light passes on its way to the focal plane. A telescope's aperture functions as a stop, and it may have additional stops.
Stops have a number of functions, including serving as a baffle to prevent stray light from reaching the sensors. A well-known "everyday" use of a stop is in a photographer's camera, implementing an adjustable aperture, which allows the camera to be adapted to conditions of varying brightness, and can also improve the focus if the target object is sufficiently bright.
The specific aim of a Lyot stop is to remove a diffracted ring of light from the occulted bright object (the Sun or a star) within a coronagraph, specifically the diffraction caused by the aperture (analogous to the rings of an Airy disk). Even with the occulter blocking direct light from the star itself, the light that the aperture diffracts can cover up the view of surrounding objects.