Fire damage - sometimes also called incendiary, exothermic, pyro or heat damage - is one of the 8 damage types in the game. It includes damage from "fire and other forms of extreme heat".
Fire damage is most effective against biological, or biological mixed targets. Fire is least effective against machines of all types. Fire damage has a chance of inflicting a short-lasting fire Damage over Time effect on it's target as well.
For more detailed information about the effects of damage, see: damage type