Definition:
Context-driven testing is a model for developing, debugging a software in a specific context where the programs will be used or expected to be used in the real world. Developers identify the intended market and evaluate the environments in which people are likely to employ the product. It is fact that users are humans with preferences, needs, abilities and limitations and programs that works well for a person may not be same for other as the context may be different.
Context-driven testing enhances user-friendliness of the end product, where functionalities are optimised for intended users as well as looking at adaptability of the product based on changing markets and social values. Context-driven school of software testing advocates continuous and creative evaluation of testing opportunities in the light of the potential information revealed and the value of that information in that particular context. It advocates testing in a way that conforms to the context of the project, as opposed to testing as opposed to testing in a way that follows some fixed notion of “best practice”. Context-driven testing could arguably be called agile testing because the principles it recommends are analogous to those suggested in the Agile Manifesto.
Further Reading:
Book: AGILE TESTING A Practical Guide for Testers and Agile Teams
http://wiki.c2.com/?ContextDrivenTesting