In medical terms, stress refers to events that cause a reaction in the body. These events may be physical (e.g. accident or injury) or psychological (e.g. fear, grief, joy). For example, situations perceived as dangerous or threatening may result in the body's "fight-or-flight" response, in which hormones are released that prepare the body to face a threat or run away from it.

It is generally believed that a certain amount of stress is necessary for physical well-being. However, intense prolonged stress can lead to psychological and medical problems. In the brain, long-term stress can lead to memory lapses and even to atrophy or death of brain cells (neurons). The amount of stress an individual can stand before suffering such problems varies depending on the individual's health, environment and psychological makeup.

Further reading:

Stress: Friend or Foe?