Functional training is targeted training, i.e. exercises that help you perform activities of daily living more easily, i.e. train your body in a way that improves your performance in everyday life.
These exercises usually use the entire body, or at least several muscles, and focus on core strength and stability.
A good example of an exercise that could be used for this: squats, because in your everyday life you probably squat for various reasons: to pick something up off the floor, to stand up or sit down, etc.