An oratorio is a large musical composition for orchestra, choir, and soloists, according to The Other Wiki. Like an opera, an oratorio has recognizable characters, and is similar in length. Oratorios also tell a story, with particular singers assigned the roles of certain characters (usually, the soloists get the lead parts and the choir plays the role of Greek Chorus). But unlike operas, oratorios are strictly concert pieces, with no props or costumes.
Oratorios are usually religious in nature, telling a story from the Bible or a saint's legend. The form was invented to keep the opera singers employed during Lent, when the theatres were closed down.
Oratorios are also similar to cantatas, in that cantatas are also large-scale vocal works and occasionally identifiable characters, but they usually do not tell a story (Bach's Coffee Cantata is a notable exception).
The generally recognized king of oratorios is George Frederic Handel (much as his contemporary Johann Sebastian Bach was the king of cantatas), who wrote lots of them because they were cheaper to produce than operas but brought in nearly as many people paying almost or just as much for the ticket (and so had higher profit margins—no fool, he). Handel's Messiah (the source of the famous Hallelujah chorus) is probably the best-known oratorio out there, though J.S. Bach's two extant oratorios, the St. Matthew Passion and the St. John Passion, are also well-known.