It is the present participle of the verb "bailar" (to dance), and it can be used in a variety of contexts:
* As a verb: "Estoy bailando" (I am dancing)
* As a noun: "Me encanta la música para bailar" (I love music for dancing)
* As an adjective: "El baile estuvo bailando" (The dance was lively/spirited)
It's important to note that while "bailando" is the most common translation of "dancing," other words like "baile" (dance) or "danza" (dance, especially formal) might be more appropriate depending on the context.