Put simply, permaculture is about people living in a truly sustainable way, and permaculture design is about creating sustainable habitats for people, crops, animals and wildlife.
Permaculture is a highly transferable design process based on the laws of ecology. By studying natural ecosystems we try to learn how nature can be so abundant, efficient and stable. Permaculture uses the same principles to create sustainable, highly productive habitats.
Some aspects of permaculture have been practised for thousands of years, while others are new. The name was coined and popularised by Bill Mollison in the 1970s, when he wrote a number of books on PERMAnent agriCULTURE, which over time has developed into the wider notion of creating a PERMAnent CULTURE.
James has adapted this diagram from Glen Williams: