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In the context of a search engine, an index is the collection of web data crawled by search spiders, and organized in an easy to access catalog or database. When you search for keywords in a search engine, the behind-the-scenes software does a quick and thorough search of the current index to find relevant pages.
A search engine index is constantly changing, and most modern search engines have huge indexes accompanied by very complex software used to manipulate and traverse the index quickly and efficiently.