The traditional definition of a sacrament is this: "A sacrament is a visible sign, instituted by Christ, to give grace." Within this definition there are three important statements:
A Visible Sign
An action is performed by a minister (usually a priest).
For example, when a baby is baptized in the church the priest pours water over its head and at the same time says the words "I baptize you in the name of the Father and of the Son and of the Holy Spirit."
That is a visible sign.
Instituted by Christ
The Lord Jesus Christ instructed His church to offer the seven sacraments to His followers.
For example, His directive to His disciples in Matthew's Gospel (28/19), “Go then, to all peoples everywhere and make them my disciples; baptize them in the name of the Father, the Son, and the Holy Spirit and teach them to obey everything I have commanded you.”
To give grace
Grace is God's free gift of Himself as the controlling influence in our life and the decisions we make once we have committed ourselves to Him in faith.
In summary, a sacrament is one of the means God has chosen to influence our life in the direction of his purpose for giving us life.
The seven sacraments are Baptism, Eucharist, Confirmation, Reconciliation, Anointing of the Sick, Matrimony, and Holy Orders.