Decoupling capacitor
also known as: Bypass capacitor
A small capacitor placed next to a chip's power pin to supply its instantaneous current demands locally, so fast spikes don't have to travel through the inductance of the power wiring. It decouples the chip from its supply's slowness.
In practice
The 100 nF ceramic next to every IC is the most-placed component in electronics. Placement IS the function: it works because it's close. A bulk capacitor (1–10 µF) per rail region handles the slower swings; the small one handles the edges.