It can be:
* A new word: You've never encountered it before.
* A word you've seen/heard but can't recall the meaning: You've forgotten its definition.
* A word you understand in one context but not another: The word has multiple meanings, and you only know one.
For example, if you read the sentence "The philologist studied the ancient texts," and you don't know what "philologist" means, then it's an unfamiliar word for you.
Unfamiliar words can be frustrating when reading, listening, or learning. However, they can also be an opportunity to expand your vocabulary and knowledge!