A cel is a single animation frame. The term itself comes from film animation where animated objects are drawn on transparent plastic sheets and placed over a static background to reduce the amount of drawing that the animators have to do.
In AGI, the concept is similar. A static background image, made from a picture resource, is drawn. On top of this, animated objects are drawn using cels, which are bitmap images (see note below) with a designated transparency color. Any pixels in the cel that are of the transparent color are not drawn when the cel is drawn over the background. This allows cels, which are actually rectangular, to have any shape that the visual artist wants them to have.
Cels can be used by themselves as a small but unmoving image, or a sequence of cels each - slightly different than the cels immediately before and after it - can provide the illusion of smooth movement. In reality, the still images are drawn sequentially and erased with the background image between each frame of animation.
Note: the term "bitmap" does not refer specifically to the Windows Bitmap file format (files ending in BMP or DIB). The term "bitmap" is a graphics term referring to a rectangular collection of pixels or color data.