The designation refers to the West Bank, Gaza Strip and East Jerusalem, but does not include the Golan Heights or the Sinai Peninsula, which were also captured by Israel in 1967.

Other terms used to describe the area are the "occupied territories", "occupied Palestinian territories", "Israeli-occupied territories", "disputed territories", "Judea and Samaria, and Gaza", "Yesha", "liberated territories", "1967 territories", and simply "the territories". The United Nations generally uses the term "Occupied Palestinian Territory," with the "Palestinian" label having gained use since the 1970s. Previous UNSC resolutions (such as 242 and 338) use the term "Territories occupied by Israel", whereas in the UN General Assembly Resolution 181 passed on November 29, 1947, the term "Samaria and Judea" was used.

The boundaries between the West Bank and the Gaza Strip and the State of Israel, known as the Green Line, are a result of the 1949 Armistice Agreements after the 1948 Arab-Israeli War, while their boundaries with Jordan and Egypt follow the international border between the former British Mandate of Palestine and those states. The natural geographic boundaries for the West Bank and the Gaza Strip are the Jordan River and the Mediterranean Sea, respectively.

Between 1949 and 1967, these territories were occupied by Jordan and Egypt respectively, but the term "Palestinian territories" or "Occupied Palestinian Territories" gained wide usage after Israel's victory in the 1967 Six-Day War, about the same time as the term "Palestinian" first started to be used exclusively in respect to Arab population of Palestine. Since then, the United Nations and most foreign governments regard the territories as being under Israeli military occupation.

Since 1994, the autonomous Palestinian Authority has exercised various degrees of control in large parts of the territories, pursuant to the Oslo Accords.