Wiktionary
n. (context professional wrestling English) The portrayal of events within the industry as real; the portrayal of professional wrestling and the accompanying storylines as not staged or worked.
Wikipedia
In professional wrestling, kayfabe is the portrayal of staged events within the industry as "real" or "true," specifically the portrayal of competition, rivalries, and relationships between participants as being genuine and not of a staged or pre-determined nature of any kind. Kayfabe has also evolved to become a code word of sorts for maintaining this "reality" within the direct or indirect presence of the general public. Though the staged nature of professional wrestling had been a frequent topic of conversation among the media and public since at least the latter years of the early 20th century, the professional wrestling industry did not formally acknowledge this until changes in the business during the 1980s professional wrestling boom prompted attitudes within the business to change. In 1989, World Wrestling Federation owner Vince McMahon testified before the New Jersey state senate that wrestling was staged. Long sanctioned by New Jersey and other states as an athletic exhibition for regulation and taxation purposes, McMahon sought to eliminate oversight, and hence taxation, on the WWF's house shows and pay-per-view events held within the state.
Kayfabe is often seen as the suspension of disbelief that is used to create the non-wrestling aspects of promotions, such as feuds, angles, and gimmicks, in a manner similar to other forms of fictional entertainment. In relative terms, a wrestler breaking kayfabe during a show would be likened to breaking character by an actor on-camera. Also, since wrestling is performed in front of a live audience, whose interaction with the show is crucial to its success, kayfabe can be compared to the fourth wall in acting, since there is hardly any conventional fourth wall to begin with.
In years past, one tool that promoters and wrestlers had in preserving kayfabe was in their ability to attract a loyal paying audience in spite of limited or nearly nonexistent exposure. Professional wrestling had long been shunned by mainstream media due to lingering doubts over its legitimacy, and its presentation on television was largely limited to self-produced programming, not unlike infomercials of the present day. Scrutiny was largely limited to certain U.S. states with activist athletic commissioners, whose influence finally waned by the late 20th century, with mixed martial arts events taking the attention boxing and wrestling once held throughout the United States. It was commonplace for wrestlers to adhere to kayfabe in public, even when outside the ring and off-camera, in order to preserve the illusion that the competition in pro wrestling was not staged. This was due in no small part to feuds between wrestlers sometimes lasting for years, and which could be utterly destroyed in seconds if they were shown associating as friends in public, and thus potentially affect ticket revenue.
With the advent of the Internet wrestling community, as well as the sports entertainment movement, the pro wrestling industry has become less concerned with protecting so-called backstage secrets and typically maintains kayfabe only during performances. However, kayfabe is occasionally broken, including during performances, in order to achieve a number of goals, among them advancing the storylines, explaining prolonged absences (often due to legitimate injury), paying tribute to other wrestlers and sometimes for comedic effect or that of driving insider humor.